Re settles 1ps lower at 83.44/$

Mumbai: The rupee paired its initial gains and settled 1paisa lower at 83.44 against the US dollar on Wednesday in sync with the domestic equity markets that turned choppy at the fag-end of the session.Forex traders said the gaining momentum in the local unit was snapped by a firm American currency and higher level of crude oil prices in the overseas market. At the interbank foreign exchange market, the local unit opened strong at 83.39 and moved in the range of 83.34 and 83.48 against the greenback during the session.

The local unit finally settled at 83.44 against the American currency, registering a loss of 1paisa from previous closing level. On Tuesday, the rupee had settled 12 paise higher at 83.43 against the US dollar. Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said the rupee traded on a volatile note, showing strength at the opening but giving up gains as the dollar index found support near 104.80.

“The rupee is anticipated to continue trading in a volatile range between 83.25-83.60.” Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.01 per cent at 104.88. Analysts said the dollar index fell initially as the US data showed the growth in retail sales was lower than expected, though the currency recovered with May industrial output numbers topping the forecast.

Officials of the US Federal Reserve also indicated a hawkish stance to continue, dousing hopes of an interest rate cut until December. In the domestic equity markets, Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth Rs 2,569.40 crore, according to exchange data. Analysts attributed the strong FII buying to the firm domestic macroeconomic outlook and a sharp fall in the US treasury yield.