Rupee trades in narrow range against US dollar in early trade

The rupee witnessed range-bound trading in initial deals against the US dollar on Wednesday, as the support from positive macroeconomic data was negated by elevated crude oil prices.

Forex traders said a negative trend in domestic equities and the overall strength of the American currency in the overseas market weighed on investor sentiments.

At the interbank foreign exchange, the rupee opened at 83.36 against the greenback, registering a rise of 6 paise over its previous close.

In initial deals, the rupee also saw a low of 83.40 against the greenback.

The rupee on Tuesday consolidated in a narrow range and settled 3 paise lower at 83.42 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09 per cent lower at 104.71.

Brent crude futures, the global oil benchmark, advanced 0.08 per cent to $88.99 per barrel.

“Brent has risen to $89 per barrel on fresh supply concerns stemming from Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East. This is the highest level seen this year so far,” IFA Global Research Academy said in a research note.

Rising crude prices are a bit of a concern for the Rupee as it threatens current account dynamics which are currently favorable, the note said.

The rupee is likely to trade in a 83.20-83.40 range with sideways price action, the note added.

On the domestic equity market front, Sensex declined 298.82 points, or 0.40 per cent, to 73,605.09 points. The Nifty fell 84.35 points, or 0.38 per cent, to 22,368.95 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth ₹1,622.69 crore, according to exchange data.

Meanwhile, India’s manufacturing sector growth climbed to a 16-year high in March on the back of the strongest increase in output and new orders since October 2020, amid reports of buoyant demand conditions, a monthly survey said on Tuesday.

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