Rupee flat at 84.43 against USD; low crude price negates dollar strength

The rupee traded in an almost flat note and settled 1 paisa lower at 84.43 (provisional) against the US dollar on Tuesday, as support from positive domestic equity markets and lower crude oil prices was negated by strength of the American currency in the overseas market.

Forex traders said the Ukraine-Russia war took a new turn with Russia updating its nuclear doctrine and Ukraine aimed American missiles at Russia. Safe haven assets like Gold, JPY and CHF and to some extent dollar were bought and rupee felt the heat and was sold at the closing hours.

At the interbank foreign exchange, the rupee opened at 84.39 and stayed range-bound throughout the session. It finally settled at 84.43 (provisional) against the greenback, down 1 paisa from its previous close.

On Monday, the rupee recovered from its lowest level of 84.46 to settle 4 paise higher at 84.42 against the US dollar.

Praveen Singh, Associate VP, Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said the $-INR pair is likely to trade in this range in the near-term until the US yields break higher decisively. The 10-year US yields face a crucial resistance at 4.50 per cent.

"Traders will closely monitor the assembly elections in Maharashtra and Jharkhand. In addition, India's PMIs data slated to be released on Friday will also be on traders' radar," he added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.15 per cent at 106.35.

Brent crude, the global oil benchmark, declined by 0.42 per cent to $ 72.99 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex rose 239.37 points, or 0.31 per cent, to close at 77,578.38 points, while Nifty climbed 64.70 points, or 0.28 per cent, to settle at 23,518.50 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth Rs 1,403.40 crore, according to exchange data.