Mumbai: The rupee consolidated in a narrow range and depreciated 3 paise to close at 79.86 against the US dollar on Wednesday.
At the interbank foreign exchange market, the domestic currency opened at 79.84 per dollar. It hovered in a range of 79.68 to 79.87 during the session.
The domestic unit finally settled at 79.86, down 3 paise over its previous close of 79.83.
A surge in crude oil prices and mixed-to-negative domestic equity markets restricted the rupee’s movement. The greenback declined on disappointing economic data from the US, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Choudhary further added that safe-haven appeal on weak global markets and surge in US Treasury yields supported the dollar. However, FII inflows may support the rupee at lower levels.
“Market participants may also remain cautious ahead of Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium later this week,” Choudhary said, adding that the USD/INR spot price is expected to trade in a range of Rs 79.20 to Rs 80.50 in the next couple of sessions.
“Rupee continued to consolidate in a narrow range even as the dollar rose sharply against major crosses in the last few sessions. Earlier the euro fell to fresh two-decade lows after data showed euro zone business activity contracted for the second straight month in August,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.03 percent at 108.65.
On the domestic equity market front, the BSE Sensex ended 54.13 points or 0.09 percent higher at 59,085.43, while the broader NSE Nifty advanced 27.45 points or 0.16 percent to 17,604.95.
Foreign institutional investors were net buyers in the capital market on Wednesday as they purchased shares worth Rs 23.19 crore, as per exchange data.
In the overseas markets, the Dollar Index rebounded on Wednesday afternoon trade in Asia.
While the Euro fell against the greenback during afternoon trade in Asia amid growing recession fears fuelled by a possible energy supply crunch.
The Sterling crashed the dollar in afternoon trade in Asia tracking the strength of the greenback.
The Japanese Yen remained flat as investors remained cautious ahead of data and Fed Chair Powell’s speech this week.