Representative image of Indian Rupee and US Dollar.
Credit: iStock Image.
Mumbai: The rupee depreciated 11 paise to close at 83.65 (provisional) against the American currency, weighed down by a muted trend in domestic equities and rising crude oil prices.
The Indian rupee opened higher on Tuesday as domestic equities touched fresh record highs. However, the rupee lost early gains and closed in the red and domestic equity markets also followed suit and closed in the negative territory.
Forex traders said a surge in crude oil prices weighed on the rupee, while the US Dollar weakened as China announced fresh stimulus to boost its economy.
At the interbank foreign exchange market, the local unit opened at 83.54 against the American currency and finally settled at 83.65 (provisional) against the US dollar, down 11 paise from its previous close.
On Monday, the rupee pared its early gains to close lower by 2 paise at 83.54 against the US currency.
"We expect the rupee to trade with a positive bias amid improved global risk appetite following China's stimulus and softness in the dollar. However, elevated crude oil and other commodity prices may cap sharp upside," said Anuj Choudhary -- Research Analyst at Sharekhan by BNP Paribas.
Choudhury further said traders may take cues from US CB consumer confidence data and speeches by Federal Open Market Committee (FOMC) members. "USDINR spot price is expected to trade in a range of Rs 83.45 to Rs 83.85," he said.
On the domestic equity markets front, the Sensex declined 14.57 points, or 0.02 per cent, to settle at 84,914 points, while the Nifty rose 1.35 points, or 0.01 per cent, to close at 25,940.40 points.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell marginally by 0.05 per cent to 100.79.
Brent crude, the international benchmark, rose 2.42 per cent to 75.69 in futures trade.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday, as they purchased shares worth Rs 404.42 crore, according to exchange data.
Meanwhile, S&P Global Ratings on Tuesday retained India's growth forecast at 6.8 per cent for the current fiscal year and said it expects the Reserve Bank of India (RBI) to start cutting interest rates in its October monetary policy review.
In the economic outlook of Asia Pacific, S&P Global Ratings also retained its GDP growth forecast for the 2025-26 fiscal year at 6.9 per cent and said solid growth in India will allow the RBI to focus on bringing inflation in line with its target.