Rupee Settles Flat at 70.98 Against US Dollar

Mumbai: The rupee pared early morning gains to settle 2 paise down at 70.98 against the US currency on Tuesday amid lack of any major triggers on the domestic front.

Forex traders said while sustained foreign fund inflows and heavy buying in domestic equities supported the rupee, rising crude oil prices and gains in the dollar in global markets restricted the upmove.

At the interbank foreign exchange market, the rupee had opened at 70.96 against the US dollar. During the day, the domestic unit saw a high of 70.87 and a low of 71.02.

The domestic unit finally settled at 70.98, lower by 2 paise over the previous closing price. On Monday the rupee had settled at 71.00 against the American currency.

"We expect that in the next couple of sessions volatility for rupee could remain low as no major economic data is expected to release. The USDINR(Spot) to quote in the range of 70.70 and 71.20," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services Private Ltd.

Forex traders said heavy buying in domestic equities and foreign fund flows supported the local unit.

On the domestic market front, the 30-share BSE barometer settled 413.45 points, or 1.01 per cent, higher at its all-time high of 41,352.17. Similarly, the broader NSE Nifty rallied 111.05 points, or 0.92 per cent, to its record closing high of 12,165.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, as they purchased shares worth Rs 728.13 crore on Monday, exchange data showed.

"Rupee extended gains till afternoon trade on Tuesday on likely FPI inflows in to local stocks following improved sentiments after US-China reached a preliminary trade deal and positive measure by Government," LKP Securities Senior Research Analyst ( Commodity & Currency) Jateen Trivedi said.

Market participants, however said that rising crude prices weighed on the local currency.

Brent futures, the global oil benchmark, rose 0.26 per cent to USD 65.51 per barrel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.10 per cent to 97.11.

The 10-year government bond yield was at 6.76 per cent on Tuesday.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.9410 and for rupee/euro at 79.0084. The reference rate for rupee/British pound was fixed at 94.9645 and for rupee/100 Japanese yen at 64.85.