Rupee settles flat at 79.78 against US dollar

Mumbai: 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.

At the interbank forex market, the local unit opened at 79.73 against the greenback and finally settled at 79.78 (provisional), unchanged from its previous close.

During the day the local unit witnessed an intra-day high of 79.72 and a low of 79.81 against the American currency.

On Monday, the rupee rose by 12 paise to close at 79.78 against the US dollar.

According to Dilip Parmar, Research Analyst, HDFC 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.

Moreover, weaker domestic equities and higher crude oil prices also weighed on the domestic unit.

“Dollar traders are cautious as the market is eager to see if the softer economic data has changed the Fed’s hawkish rate path. Traders are giving renewed attention to energy prices after Russia once again reduced the flow of piped gas to Germany,” Parmar said, adding that Spot USD/INR is expected to trade in the range of 79.30 to 80.10.

The dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.31 percent at 106.81.

Brent crude futures, the global oil benchmark, rose 1.71 percent to USD 106.95 per barrel.

On the domestic equity market front, the BSE Sensex ended 497.73 points or 0.89 percent lower at 55,268.49, while the broader NSE Nifty declined 147.15 points or 0.88 percent to 16,483.85.

Foreign institutional investors remained net sellers in the capital market on Monday, offloading shares worth Rs 844.78 crore, as per exchange data.