Rupee vs Dollar: Domestic currency falls 4 paise to close at 83.36 against US dollar

Currency market update: The rupee (INR) traded on a flat note on Thursday, December 7, and settled at 83.36 (provisional) against the US dollar. Tracking elevated American currency in the overseas market and a muted trend in domestic equities, the domestic currency depreciated by four paise for the day from its previous close after moving within a range of 83.36-83.37 throughout the session.

At the interbank foreign exchange, the rupee began the day at 83.36 against the dollar and fell to as low as 83.37 during the session before settling at 83.36 (provisional) against the greenback for the day.

"Indian rupee traded on a flat note on Thursday. A positive US Dollar and weak domestic markets weighed on the rupee. However, weak crude oil prices and FII inflows supported the rupee at lower levels," said PTI citing Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

The rupee is expected to trade with a slight negative bias on positive tone in the US Dollar and risk aversion in global markets, Choudhary added.

"However, a weak tone in crude oil prices and foreign inflows may support the rupee at lower levels. Traders may take cues from US weekly unemployment change and Challenger job cuts data. Investors may remain cautious ahead of the RBI's monetary policy decision on Friday," he said.

The dollar index — which measures the value of the American currency against six peers other than the rupee — was last seen trading 0.28 per cent lower at 103.86.

Global oil benchmark Brent crude futures advanced 1.02 per cent to USD 75.08 per barrel at the last count.

In contrast to this, domestic equity benchmarks Nifty50 and Sensex declined 0.17-0.19 per cent. The Sensex went down 132.04 points for the day to close at 69,521.69 points while the Nifty50 declined 36.55 points to settle at 20,901.15 points.

The Reserve Bank of India is likely to maintain the status quo on the short-term interest rate in its Monetary Policy review.

RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) began its three-day deliberations on December 6. Das will unveil the decision of the six-member MPC on December 8.

On Wednesday, December 6, the rupee rose by 5 paise and settled at 83.32 against the American dollar.

According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth Rs 79.88 crore.

With inputs from PTI