Mumbai rupee appreciated by 11 paise to settle at 83.34 against the US dollar on Friday amid recent inflow of foreign funds.
Forex traders said the strength of the US currency in the overseas market, high crude oil prices and demand for US dollars by oil marketing companies limited the local unit's strong gains.
At the interbank forex market, the local unit opened at 83.42 and hit an intraday high of 83.34 and a low of 83.49 against the dollar during the session.
It finally settled at 83.34 against the dollar, registering a gain of 11 paise over its previous close.
On Thursday, the rupee appreciated by 12 paise and stood at 83.45 against the US dollar.
According to Anuj Choudhary, Sharekhan Research Analyst at BNP Paribas, the rupee gained on the back of the inclusion of Indian bonds in JP Morgan's emerging market bond index. However, a positive US dollar and rising crude oil prices limited the strong gains.
"We expect the rupee to trade with a slight negative bias amid the strength of the US dollar and a rise in crude oil prices. Demand for dollars by oil marketing companies (OMCs) and importers may also weigh on the rupee," Choudhary said.
Choudhary further noted that fresh foreign inflows and positive tone in domestic equities can support the rupee.
"Traders can take inspiration from India's fiscal deficit data. Traders can also take inspiration from the core PCE price index, personal income and US Chicago PMI data. The spot price is expected USD-INR is trading in a range of 83.20 to 83.80 rupees," he said.
Meanwhile, the dollar index, which measures the dollar's strength against a basket of six currencies, was trading at 105.91, up 0.01 percent.
Brent crude futures, the global oil benchmark, rose 0.86 percent to $87.13 a barrel.
In the domestic stock market, benchmark-sensitive indices experienced high volatility. It scaled new intraday highs, but trimmed gains and settled for the day in negative territory.
The 30-share BSE Sensex fell 210.45 points, or 0.27 per cent, to close at 79,032.73 points. The broader NSE Nifty closed 33.90 points, or 0.14 per cent, lower at 24,010.60 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 23.09 crore, according to exchange data.
Forex traders said the strength of the US currency in the overseas market, high crude oil prices and demand for US dollars by oil marketing companies limited the local unit's strong gains.
At the interbank forex market, the local unit opened at 83.42 and hit an intraday high of 83.34 and a low of 83.49 against the dollar during the session.
It finally settled at 83.34 against the dollar, registering a gain of 11 paise over its previous close.
On Thursday, the rupee appreciated by 12 paise and stood at 83.45 against the US dollar.
According to Anuj Choudhary, Sharekhan Research Analyst at BNP Paribas, the rupee gained on the back of the inclusion of Indian bonds in JP Morgan's emerging market bond index. However, a positive US dollar and rising crude oil prices limited the strong gains.
"We expect the rupee to trade with a slight negative bias amid the strength of the US dollar and a rise in crude oil prices. Demand for dollars by oil marketing companies (OMCs) and importers may also weigh on the rupee," Choudhary said.
Choudhary further noted that fresh foreign inflows and positive tone in domestic equities can support the rupee.
"Traders can take inspiration from India's fiscal deficit data. Traders can also take inspiration from the core PCE price index, personal income and US Chicago PMI data. The spot price is expected USD-INR is trading in a range of 83.20 to 83.80 rupees," he said.
Meanwhile, the dollar index, which measures the dollar's strength against a basket of six currencies, was trading at 105.91, up 0.01 percent.
Brent crude futures, the global oil benchmark, rose 0.86 percent to $87.13 a barrel.
In the domestic stock market, benchmark-sensitive indices experienced high volatility. It scaled new intraday highs, but trimmed gains and settled for the day in negative territory.
The 30-share BSE Sensex fell 210.45 points, or 0.27 per cent, to close at 79,032.73 points. The broader NSE Nifty closed 33.90 points, or 0.14 per cent, lower at 24,010.60 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 23.09 crore, according to exchange data.
