The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.06 percent higher at 103.32 (representative figure).
Forex traders said the rupee rose earlier in the day as domestic equity indices hit record highs after a spectacular BJP win in 3 states.
The rupee pared its early gains and settled down 3 paise at 83.36 (provisional) against the US dollar on Monday amid a recovery in the greenback in overseas markets.
Forex traders said the rupee rallied earlier in the day as domestic equity indices hit record highs after the ruling BJP won landslide victories in three Hindi heartland states. Moreover, sustained foreign fund inflows have also supported the local currency.
In the interbank foreign exchange market, the local unit opened at 83.28 and touched a low of 83.37 against the greenback. It finally settled at 83.36 (tentative) against the dollar, down 3 paise from its previous close. On Friday, the rupee settled at 83.33 against the American currency.
“The Indian rupee has taken out initial gains and moved lower following a weaker Chinese currency. The market ignored positive political news and lower crude oil prices as traders worried about two-pronged intervention by the central bank,” said Dilip Parmar, research analyst, HDFC Securities.
Looking at the price action, the rupee is facing resilience in crossing the 83.10 to 83.50 range, he said.
“However, seasonal patterns and expectations of year-end dollar inflows may support the rupee to limit losses in case of a short covering bounce in the greenback,” Parmar said.
According to traders, markets are now waiting for RBI monetary policy on December 8 and non-farm payrolls data for further signals from the US on the same day.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.06 percent higher at 103.32.
Brent crude futures, the global oil benchmark, were down 0.51 percent at USD 78.48 a barrel.
On the domestic equity market front, the Sensex settled up 1,383.93 points or 2.25 percent at 68,865.12 points.
The Nifty gained 418.90 points or 2.07 percent to 20,686.80 points. Foreign institutional investors were net buyers in the capital markets on Friday as they bought shares worth Rs 1,589.61 crore, according to exchange data.
Meanwhile, India’s foreign exchange reserves rose by USD 2.538 billion to USD 597.935 billion in the week ended November 24, the Reserve Bank said on Friday.
In the previous reporting week, overall reserves jumped by USD 5.077 billion to USD 595.397 billion.
(This story has not been edited by News18 staff and appears from a syndicated news agency feed – PTI)
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