Mumbai: The rupee on Tuesday closed 11 paise higher at 83.75 (provisional) against the US dollar amid a weak greenback against major currencies and fall in crude oil prices.
Forex traders said a fall in wholesale inflation to a four-month low and a strong domestic market boosted the domestic unit.
At the interbank forex market, the rupee opened at 83.87, down 1 paise from its previous close and traded in the range of 83-70 to 83.87 during the day.
It closed at 83.75 against the US dollar (provisional), which is 11 paise higher than its previous close of 83.86.
"The rupee gained on Tuesday due to positive sentiments in domestic markets and weakness in the US dollar index. Domestic markets are trading near record highs," said Anuj Chaudhary, Research Analyst, Sharekhan by BNP Paribas.
India's wholesale inflation declined to 1.31 percent in August from 2.04 percent in July.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.15 percent at 100.60.
International benchmark Brent crude fell 0.66 percent to US$72.27 per barrel in futures trade.
In the domestic equity market, Sensex rose 90.88 points to close at a new all-time high of 83,079.66, while Nifty rose 34.80 points to its record high of 25,418.55.
Foreign institutional investors (FIIs) became net sellers in the capital market on Monday and sold shares worth Rs 1,634.98 crore, according to exchange data.
"We expect the rupee to trade with a slightly positive bias due to strength in domestic markets. Weak US dollar may also support the rupee," Chaudhary said. He said the USD-INR spot price is expected to remain in the range of Rs 83.60. -83.95.
Forex traders said a fall in wholesale inflation to a four-month low and a strong domestic market boosted the domestic unit.
At the interbank forex market, the rupee opened at 83.87, down 1 paise from its previous close and traded in the range of 83-70 to 83.87 during the day.
It closed at 83.75 against the US dollar (provisional), which is 11 paise higher than its previous close of 83.86.
"The rupee gained on Tuesday due to positive sentiments in domestic markets and weakness in the US dollar index. Domestic markets are trading near record highs," said Anuj Chaudhary, Research Analyst, Sharekhan by BNP Paribas.
India's wholesale inflation declined to 1.31 percent in August from 2.04 percent in July.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.15 percent at 100.60.
International benchmark Brent crude fell 0.66 percent to US$72.27 per barrel in futures trade.
In the domestic equity market, Sensex rose 90.88 points to close at a new all-time high of 83,079.66, while Nifty rose 34.80 points to its record high of 25,418.55.
Foreign institutional investors (FIIs) became net sellers in the capital market on Monday and sold shares worth Rs 1,634.98 crore, according to exchange data.
"We expect the rupee to trade with a slightly positive bias due to strength in domestic markets. Weak US dollar may also support the rupee," Chaudhary said. He said the USD-INR spot price is expected to remain in the range of Rs 83.60. -83.95.