Image representation. | Image Credit: Reuters
The rupee rallied in a narrow range and settled 6 paise lower at 81.88 (provisional) against the American currency on Tuesday (April 2) as investors preferred to stay on the sidelines ahead of the outcome of the US Fed meeting.
At the interbank foreign exchange, the local unit opened on a positive note at 81.75 but pared early gains to settle 6 paise lower at 81.88 against the US dollar despite firmer trends in domestic equities.
During the day, the rupee touched a high of 81.72 and a low of 81.95 against the American currency.
On Friday, the rupee closed at 81.82 against the US currency.
Forex and equity markets were closed on Monday due to ‘Maharashtra Day’.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.15% to 102.30.
Brent crude futures, the global oil benchmark, were down 0.55% at $78.87 a barrel.
Forex traders said investors are waiting for clues from the US FOMC meeting starting next day. The market now awaits the results of the Federal Open Market Committee (FOMC) on May 3.
The rupee weakened throughout the day as traders and hedgers bet on the dollar ahead of tomorrow’s FOMC policy decision, said Dilip Parmar, Research Analyst, HDFC Securities.
“Spot USD/INR is expected to find support at 81.50, the 200-day simple moving average and resistance at 82.30. We expect a short covering rally in the near term before breaking the long-term support line,” said Mr. Parmar.
This week will be a shortened holiday as the market remains open for only three trading sessions.
In the domestic equity market, the 30-share BSE Sensex advanced 242.27 points or 0.40% to close at 61,354.71. The broader NSE Nifty rose 82.65 points or 0.46% to settle at 18,147.65.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Friday as they bought shares worth ₹3,304.32 crore, according to exchange data.
On the domestic macroeconomic front, record GST collections and a four-month high manufacturing PMI are helping bullish sentiments.
GST collection in April rose 12% year-on-year to over ₹1.87 lakh crore, hitting an all-month high, Finance Ministry data released on Monday said.
Manufacturing activities in India accelerated further and reached a four-month high in April. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) rose from 56.4 in March to 57.2 in April.
