Mumbai: The rupee opened flat against the US dollar in early trade on Tuesday due to soft trend in domestic stock markets and strengthening of the American currency in foreign markets.
Forex traders said the US dollar strengthened on rising demand from oil importers and stronger-than-expected economic data from the US. Apart from this, rising crude oil prices also impacted the local unit.
In the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.49 against the American currency and reached 83.50 in early trade.On Monday, the rupee closed 10 paise down at 83.50 against the US dollar.
The Reserve Bank of India's positive economic outlook with solid growth and unchanged inflation projections suggests there is little scope for any early rate cuts amid rising inflation prospects. The rupee is likely to benefit from this favorable interest rate differential, said Amit Pabari, MD, CR Forex Advisors.
Moreover, foreign institutional investors (FIIs) have resumed their buying. According to exchange data, FIIs were net buyers in the capital market on Monday as they bought shares worth Rs 2,572.38 crore.Besides, the rupee is likely to benefit from anticipated inflows such as Reliance Infrastructure raising US$350 million, SpiceJet planning to raise US$250 million and Clix Capital aiming to raise US$600 million, Pabari said.
Considering these factors, the rupee is expected to remain in the range of 82.90 to 83.70, he said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.02 percent lower at 105.12.
Global oil benchmark Brent crude futures fell 0.20 per cent to US$81.47 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading at 76,334.63 points, down by 155.45 points or 0.20 percent. The broader NSE Nifty was down 33.25 points or 0.14 per cent at 23,225.95.
Forex traders said the US dollar strengthened on rising demand from oil importers and stronger-than-expected economic data from the US. Apart from this, rising crude oil prices also impacted the local unit.
In the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.49 against the American currency and reached 83.50 in early trade.On Monday, the rupee closed 10 paise down at 83.50 against the US dollar.
The Reserve Bank of India's positive economic outlook with solid growth and unchanged inflation projections suggests there is little scope for any early rate cuts amid rising inflation prospects. The rupee is likely to benefit from this favorable interest rate differential, said Amit Pabari, MD, CR Forex Advisors.
Moreover, foreign institutional investors (FIIs) have resumed their buying. According to exchange data, FIIs were net buyers in the capital market on Monday as they bought shares worth Rs 2,572.38 crore.Besides, the rupee is likely to benefit from anticipated inflows such as Reliance Infrastructure raising US$350 million, SpiceJet planning to raise US$250 million and Clix Capital aiming to raise US$600 million, Pabari said.
Considering these factors, the rupee is expected to remain in the range of 82.90 to 83.70, he said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.02 percent lower at 105.12.
Global oil benchmark Brent crude futures fell 0.20 per cent to US$81.47 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading at 76,334.63 points, down by 155.45 points or 0.20 percent. The broader NSE Nifty was down 33.25 points or 0.14 per cent at 23,225.95.
