The Indian rupee settled 1 paisa lower at 84.43 against the US dollar on Tuesday, as positive domestic equity markets and lower crude oil prices were offset by the strength of the American currency in global markets. Forex traders noted that developments in the Ukraine-Russia conflict, with Russia updating its nuclear doctrine and Ukraine targeting American missiles at Russia, prompted a rush towards safe-haven assets like gold, the Japanese yen, the Swiss franc, and the US dollar, putting downward pressure on the rupee towards the session’s close.
The rupee opened at 84.39 and traded in a narrow range throughout the day, finally closing at 84.43. On Monday, the rupee had recovered from its lowest level of 84.46 to close 4 paisa higher at 84.42 against the greenback. Praveen Singh, Associate VP at Sharekhan by BNP Paribas, suggested that the USD-INR pair is expected to remain within this range unless US yields break decisively higher. The 10-year US Treasury yield faces resistance at 4.50%.
Market participants are also closely watching the assembly elections in Maharashtra and Jharkhand, along with India’s PMI data due on Friday, which may influence currency movements. The dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.15% to 106.35.
Meanwhile, Brent crude oil prices dropped 0.42% to $72.99 per barrel. In the domestic equity market, the 30-share BSE Sensex rose by 239.37 points (0.31%) to close at 77,578.38 points, and the Nifty climbed 64.70 points (0.28%) to settle at 23,518.50 points. Foreign Institutional Investors (FIIs) were net sellers, offloading shares worth Rs 1,403.40 crore on Monday, according to exchange data.
