Rupee vs Dollar: Domestic currency gains 4 paise to settle at 83.16 against American dollar

Currency market update: The rupee (INR) settled at 83.16 (provisional) against the US dollar on the last trading day of 2023 (Friday, December 29). Helped by a weak greenback against major rivals overseas and renewed foreign capital inflows amid lower crude oil prices, the local currency registered a gain of four paise for the day from its previous close. Throughout the session, the domestic currency moved within a range of 83.10 - 83.22.

At the interbank foreign exchange, the rupee began the day at 83.14 against the dollar and fell to as low as 83.22 during the session before settling at 83.16 (provisional) against the greenback for the day. The domestic currency touched the peak of 83.10 against the greenback during intra-day deals.

The dollar index — which measures the value of the American currency against six peers other than the rupee — was last seen trading 0.13 lower at 101.36.

The US dollar recovered slightly on short coverings but declined again on expectations of interest rate cuts by the US Federal Reserve, said PTI citing Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

The rupee is likely to trade with a slight positive bias on the weak tone of the US dollar and declining crude oil prices. Fresh foreign inflows may also support the domestic currency, he added.

"Month-end dollar demand from OMCs and importers may weigh on the rupee at higher levels. Traders may take cues from India's fiscal deficit and Chicago PMI data from the US. USD-INR spot price is expected to trade in a range of Rs 82.90 to Rs 83.50," Choudhary added.

Global oil benchmark Brent crude futures climbed 0.89 per cent to USD 77.84 per barrel at the last count.

In contrast to this, domestic equity benchmarks Nifty50 and Sensex declined by 0.22 per cent - 0.23 per cent. The 30-share benchmark BSE Sensex depreciated 170.12 points for the day to settle at an all-time high of 72,240.26 points while the broader NSE Nifty fell 47.30 points to settle at 21,731.40 points.

On Thursday, December 28, the rupee had settled 17 paise lower at 83.17 against the American dollar, a day after closing at a loss of 15 paise.

According to exchange data, foreign institutional investors (FIIs) bought equities worth Rs 1,459.12 crore on Friday.

With inputs from PTI