Mumbai: The rupee consolidated in a narrow range and settled for the day 2 paise lower at 85.25 (provisional) against the US dollar on Tuesday, on recovery in the US dollar and geopolitical tensions between India and Pakistan.
However, positive domestic markets and a decline in crude oil prices cushioned the downside for the domestic unit.
At the interbank foreign exchange, the domestic unit opened at 85.06 and moved between the intra-day high of 84.96 and the low of 85.40 against the greenback. The unit ended the session at 85.25 (provisional), registering a fall of 2 paise over its previous closing level.
On Monday, the rupee appreciated 18 paise to close at 85.23 against the US dollar.
“We expect the rupee to remain under pressure amid uncertainty over trade tariffs and the ongoing geopolitical tensions between India and Pakistan,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.
Meanwhile, nearly 50 public parks and gardens located in vulnerable areas of Kashmir valley have been shut as a precautionary measure in the wake of the Pahalgam terror attack, officials said on Tuesday.
Gates have been closed at 48 of the 87 public parks and gardens in Kashmir in view of the threat perception to tourists, they said.
They said the security review was an ongoing process and more locations may be added to the list in the coming days.
Besides, the Union Cabinet will be meeting on Wednesday for the first time since the April 22 terror attack in Pahalgam that left 26 people dead.
Choudhary noted that positive tone in the domestic markets and foreign fund inflows may support the rupee at lower levels and traders may take cues from job openings and labour turnover survey (JOLTS) and CB consumer confidence data from the US.
“USD-INR spot price is expected to trade in a range of 84.90 to 85.60,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.16 per cent at 99.17.
Brent crude, the global oil benchmark, fell 1.64 per cent to USD 64.78 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex advanced 70.01 points or 0.09 per cent to close at 80,288.38, while the Nifty rose 7.45 points or 0.03 per cent to settle at 24,335.95.
Foreign institutional investors (FIIs) bought equities worth Rs 2,474.10 crore on a net basis on Monday, according to exchange data.
On the domestic macroeconomic front, India’s industrial production growth remained almost flat at 3 per cent in March sequentially, though, on a year-on-year basis, it slipped from 5.5 per cent, mainly due to poor performance of the manufacturing, mining, and power sectors.
Meanwhile, US Treasury Secretary Scott Bessent has said that India is likely to be among the first countries to finalise a bilateral trade agreement with the US to avert reciprocal tariffs by President Donald Trump.
Bessent made these remarks on Monday during an interview with CNBC’s Squawk Box’ to discuss the latest developments on President Trump’s trade negotiations with other countries.
