Rupee Settles Flat At 79.78 Against US Dollar

The rupee opened at 79.73 against the greenback and ended at 79.78 (provisional), unchanged from its previous close. The rupee pared its initial gains to settle flat on Tuesday amid muted domestic equities, firming crude oil prices and concerns over the hawkish US Fed, picking up marginally in afternoon market trade.

Rupee fell by 12 paise against the US dollar to close at 79.78 on Monday as the local unit witnessed an intra-day high of 79.72 and a low of 79.81 against the American currency.

According to market research companies Analyst, HDFC NSE Securities, forex markets registered a wait-and-see approach ahead of Wednesday’s Federal Open Market Committee (FOMC) meeting, which could favour a lower volatility environment in dollar-crosses. Strong projections by Fed members and investors’ expectations of their own economic outlooks should make market participants nervous about any immediate moves on interest rates,” he said.

The domestic unit saw further increase in weakness amid a decline in crude oil prices and weak domestic equity performance.

The dollar is trading with a bias to the downside, as traders remain cautious ahead of the latest economic data. The Fed inflation projections were a bit softer than expected, some traders may be wary of a hawkish rate path

The dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.31 per cent at 106.81. The dollar rose as investors moved away from safe-haven assets that typically rise when risk-averse money flows out of them. Brent crude futures, the global oil benchmark, rose 1.71 per cent to USD 106.95 per barrel.

On the domestic equity market front, the BSE Sensex closed at a new low of 55,084.83 on Monday, significantly down from its previous close of 54,791.62.

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