Rupee vs Dollar: Domestic currency rises 5 paise to settle at 83.32 against US dollar

Currency market update: The rupee (INR) consolidated in a narrow range on Wednesday, December 6, and settled at 83.32 (provisional) against the US dollar. Helped by a bullish trend in domestic equities and sustained foreign fund inflows, the domestic currency appreciated by five paise for the day from its previous close after moving within a range of 83.29-83.37 throughout the session.

At the interbank foreign exchange, the rupee began the day at 83.35 against the dollar and fell to as low as 83.37 during the session before settling at 83.32 (provisional) against the greenback for the day.

Elevated American currency in the overseas markets and dollar buying by the Reserve Bank of India (RBI) capped sharp gains for the local unit, said PTI citing Forex analysts.

The dollar index — which measures the value of the American currency against six peers other than the rupee — was last seen trading 0.07 per cent lower at 103.97.

"We expect the rupee to trade with a slight negative bias on positive tone in the US Dollar and fresh foreign inflows. A weak tone in crude oil prices and positive domestic markets may also support the rupee. However, the RBI intervention may cap the sharp upside. Traders may take cues from US ADP Trade balance and non-farm employment change data. Investors may remain cautious ahead of RBI's monetary policy decision on Friday," said Anuj Choudhary Research Analyst, Sharekhan by BNP Paribas.

The Reserve Bank 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) is scheduled to begin its three-day deliberations on December 6. Das will unveil the decision of the six-member MPC on December 8.

Global oil benchmark Brent crude futures declined 0.38 per cent to USD 76.91 per barrel at the last count.

In contrast to this, domestic equity benchmarks Nifty50 and Sensex surged 0.4 per cent - 0.52 per cent. The Sensex went up 357.59 points for the day to settle at its all-time high of 69,653.73 points while the Nifty50 advanced 82.60 points to hit a record 20,937.70.

On Tuesday, December 5, the rupee had settled at 83.37 against the American dollar.

According to exchange data, foreign institutional investors were net buyers in the capital market on Tuesday, as they purchased shares worth Rs 5,223.51 crore.

With inputs from PTI