The rupee showed stability within a narrow range and closed the day with a slight gain of 3 paise, settling at 83.24 (provisional) against the US dollar on Tuesday. This positive movement was attributed to the favorable performance of the domestic stock market.
Forex traders noted that the rupee exhibited a positive bias, buoyed by the encouraging trends in the domestic markets. However, the strength of the US dollar and concerns surrounding the ongoing conflict in the Middle East limited significant gains.
At the interbank foreign exchange market, the rupee commenced trading at 83.24 against the US dollar and fluctuated within the range of 83.22 to 83.26 throughout the day. Ultimately, the rupee concluded 3 paise higher at 83.24 (provisional) compared to the previous close.
Anuj Choudhary, a Research Analyst at Sharekhan by BNP Paribas, anticipates that the rupee may continue to trade with a slight positive bias due to the growing risk appetite in global markets and a decrease in crude oil prices. Additionally, diplomatic efforts aimed at mitigating the Middle East conflict might lend further support to risk assets. However, the persistent strength of the US dollar and any escalation in geopolitical tensions between Hamas and Israel could potentially restrain sharp gains. It’s worth noting that selling pressure from Foreign Institutional Investors (FIIs) and the RBI’s maturity of dollar/rupee swap transactions may exert pressure on the rupee at higher levels.