Currency market update: The rupee (INR) traded in a wide range on Tuesday, December 26, and settled at 83.19 (provisional) against the US dollar. Amid a strong American currency and outflow of foreign funds, the local unit depreciated by three paise for the day from its previous close. Throughout the session, the domestic currency moved within a range of 83.10 - 83.21.

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At the interbank foreign exchange, the rupee began the day at 83.17 against the dollar and fell to as low as 83.21 during the session before settling at 83.19 (provisional) against the greenback for the day.

The Indian rupee depreciated on recovery in the US dollar and FII outflows. However, positive domestic markets and a decline in crude oil prices cushioned the downside, said PTI citing Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas. He said the rupee is expected to trade with a slight positive bias amid rising expectations of a reduction in interest rates by the US Federal Reserve.

"However, demand for the US dollar from imports and selling pressure from FIIs may cap the upside. Geopolitical tensions in the Red Sea may also weigh on rupee at higher levels. Traders may take cues from house price index data from the US. USD-INR spot price is expected to trade in a range of Rs 82.90 to Rs 83.50," it added citing Choudhary.

The dollar index — which measures the value of the American currency against six peers other than the rupee — was last seen trading 0.02 per cent higher at 101.35.

Global oil benchmark Brent crude futures inched up 0.03 per cent to USD 79.09 per barrel at the last count.

Likewise, domestic equity benchmarks Sensex and Nifty50 advanced by 0.32 - 0.43 per cent. The 30-share benchmark BSE Sensex rose by 229.84 points for the day to settle at 71,336.80 points while the broader NSE Nifty climbed 91.95 points to settle at 21,441.35 points.

On Friday, December 22, the rupee had settled at 83.16 against the American dollar. Forex markets were closed on Monday on account of Christmas.

According to exchange data, foreign institutional investors (FIIs) were net sellers in the equity market on Friday as they offloaded shares worth Rs 2,828.94 crore.

With inputs from PTI