Rupee falls 1 paisa to 83.50 against U.S. dollar

Forex traders said the rupee gained on a weak dollar and decline in crude oil prices

The rupee pared initial gains to settle 1 paisa lower at 83.50 against the U.S. dollar on Monday, as muted domestic equities weighed on investor sentiments. | Photo Credit: REUTERS

The rupee pared initial gains to settle 1 paisa lower at 83.50 against the U.S. dollar on Monday, as muted domestic equities weighed on investor sentiments.

At the interbank foreign exchange market, the local unit opened at 83.45 and hit the intraday high of 83.44 and a low of 83.50 against the American currency during the session.

It finally settled at 83.50 against the dollar, registering a loss of one paisa over the previous close.

On Friday, the rupee settled at 83.49 against the U.S. dollar.

Forex traders said the rupee gained on a weak dollar and decline in crude oil prices. However, weak domestic markets put pressure on the domestic unit.

"The US Dollar declined on disappointing non-farm payrolls report on Friday, which raised expectations that U.S. Federal Reserve may cut interest rates in its September Federal Open Market Committee (FOMC) meeting," said Anuj Choudhary — Research Analyst at Sharekhan by BNP Paribas.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.90, higher by 0.03%.

Brent crude futures, the global oil benchmark, declined 0.88% to $85.78 per barrel.

"We expect the rupee to trade with a slight positive bias on the weak tone in the U.S. Dollar and FII inflows. However, a correction in the domestic markets and political uncertainty in France as the election results indicate a hung parliament may cap the sharp upside," Choudhary added.

In the domestic equity market, the 30-share BSE Sensex ended the day 36.22 points, or 0.05%, lower at 79,960.38 points. The broader NSE Nifty settled 3.30 points, or 0.01%, up at 24,320.55 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, as they purchased shares worth ₹1,241.33 crore, according to exchange data.

India's forex reserves dropped $1.713 billion to $651.997 billion for the week ended June 28, the Reserve Bank of India (RBI) said on Friday.