Indian Rupee Shows Marginal Recovery Against US Dollar

The Indian rupee strengthened by 2 paise against the US dollar, reaching 83.43, due to foreign capital inflows. Despite initial resistance from a strong dollar and rising oil prices, the rupee recovered on the back of a stock market rally. The Federal Reserve's interest rate decision and macroeconomic data are being closely monitored by investors, contributing to cautious market sentiment.

The rupee recovered 2 paise to 83.43 against the US dollar on Tuesday, tracking fresh foreign capital inflows amid volatility in the domestic equity markets.

According to forex analysts, the domestic currency initially faced resistance from a strong greenback and upward momentum in the crude oil prices, but recovered the lost ground during the session on the back of a sharp rally in equities in the late afternoon trade.

At the interbank foreign exchange market, the local unit opened at 83.46 and traded between 83.41 and 83.52 against the greenback during the session.

The domestic currency finally settled at 83.43 against the dollar, registering a gain of 2 paise from its previous closing level.

The rupee had settled 7 paise lower at 83.45 against the US dollar on Monday after losing 10 paise in the preceding session on Friday.

Jateen Trivedi, VP Research Analyst -- Commodity and Currency, LKP Securities, said: ''Volatility in the capital market kept the rupee range-bound. Participants are closely monitoring the upcoming interest rate decision in the US for potential price action in the rupee. Weakness persists in the rupee, albeit in a stable manner''.

Analysts also said that investors moved cautiously ahead of the US Federal Reserve's interest rate decision and upcoming macroeconomic data from the US and the domestic manufacturing growth numbers.

The Federal Open Market Committee (FOMC) meeting begins on Tuesday and the interest rate decision is expected to be announced on Wednesday.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.13 per cent to 105.58.

Brent crude futures, the global oil benchmark, rose 0.15 per cent to USD 88.53 per barrel.

On the domestic equity market front, Sensex declined 188.50 points, or 0.25 per cent, to settle at 74,482.78, and Nifty fell 38.55 points, or 0.17 per cent, to close at 22,604.85.

Foreign institutional investors (FIIs) were net buyers in the capital markets on Tuesday, as they purchased shares worth Rs 1,071.93 crore on a net basis, according to exchange data.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)