Mumbai: The rupee moved in a narrow range and slipped 3 paise to 88.78 against the US dollar in early trade on Thursday, as investors tracked developments on US fiscal policy, trade tariffs, and foreign portfolio investment (FPI) trends for direction.
Forex traders said firm domestic equity markets provided some support to the local currency at lower levels.
At the interbank foreign exchange market, the rupee opened at 88.76 and eased to 88.78 per dollar, down 3 paise from its previous close of 88.75.
According to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, the rupee is likely to trade in a tight band of 88.70–88.80, with FPIs purchasing around USD 10.2 million mainly through IPO investments. He added that the Reserve Bank of India was active at 88.80, preventing the rupee from breaching that level.
“The US government shutdown concerns and India’s trade tariff issues with the US remain key factors influencing rupee movements,” Bhansali said.
Meanwhile, the dollar index, which measures the greenback’s strength against six major currencies, was down 0.20% at 98.72. Brent crude, the global oil benchmark, declined 0.50% to USD 65.91 per barrel in futures trade.
On the domestic front, the Sensex advanced 201.23 points to 81,974.89 in early deals, while the Nifty gained 63.5 points to 25,109.65.
Foreign Institutional Investors (FIIs) were net buyers on Wednesday, purchasing equities worth Rs 81.21 crore, as per exchange data.
