Strong Greenback limits Re’s gain

Mumbai: Rupee consolidated in a narrow range and settled for the day higher by three paise at 83.24 (provisional) against the US dollar on Tuesday amid a positive trend in domestic equities.

Forex traders said the rupee is trading with a slight positive bias on positive domestic markets. However, a strong US dollar and concerns over the ongoing conflict in the Middle East capped sharp gains. At the interbank foreign exchange market, the local unit opened at 83.24 against the US dollar and moved in a range of 83.22 to 83.26 in the day trade. The rupee finally settled 3 paise higher at 83.24 (provisional) against the previous close. On Monday, the rupee settled at 83.27 against the US dollar. “We expect the rupee to trade with a slight positive bias on the rise in risk appetite in global markets and decline in crude oil prices. Diplomatic efforts to contain the Middle East conflict may also support the risk assets,” said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

However, elevated US dollar and any further escalation on geopolitical tensions between Hamas and Israel may cap sharp gains. “Selling pressure from FIIs and RBI’s maturing of dollar/rupee swap transactions may pressurise the rupee at higher levels. Traders may take cues from retail sales and industrial production data from the US. USD-INR spot price is expected to trade in a range of Rs 82.90 to Rs 83.70,” Choudhary added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.09 per cent to 106.33.