Mumbai: The rupee pared initial gains and settled for the day 5 paise lower at 83.18 against the US dollar on Tuesday, amid a negative trend in domestic equities and on dollar demand from importer at lower levels.

Forex traders said the rupee consolidated in a narrow range as elevated crude oil prices weighed on investor sentiments, while the decline in US dollar cushioned the downside. At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.14 and touched an intra-day high of 83.10 and a low of 83.19. The domestic unit finally settled for the day at 83.18, down 5paise from its previous close.

On Monday, the rupee pared its initial gains and settled for the day lower by3 paise at 83.13 against the US dollar. “We expect the rupee to trade with a slight positive bias as strength in the domestic markets and expectations of fresh foreign inflows may support the rupee,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas. Softening of the US Dollar may also support the local unit. However, a rise in crude oil prices may cap sharp upside. “Investors may remain cautious ahead of core PCE price index data later this week. USD-INR spot price is expected to trade in a range of Rs82.90 to Rs83.50,” Choudhary added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 104.47, lower by 0.12 per cent, as investors trimmed their positions ahead of inflation data.