The rupee extended its upward trend for the second consecutive day, strengthening 9 paise to 82.93 against the US dollar in early trade on Monday, tracking positive signals from domestic equities and a weakening US dollar against major overseas rivals.
However, strong crude oil prices hovering above $90 a barrel and foreign fund outflows have weighed on the Indian currency, currency traders said.
At the interbank foreign exchange market, the domestic unit opened 9 paise higher at 82.93 and traded in a tight range of 82.90 to 82.96 against the US dollar.
On Friday, the rupee closed at 83.02 against the US dollar.
Gaurang Somaiya, foreign exchange and bullion analyst at Motilal Oswal Financial Services, said this week’s domestic inflation data is noteworthy and may trigger currency fluctuations.
“Volatility across major cross currency pairs, including the rupee, is likely to remain low today as no major economic data is expected to be released. We expect USD/Rupee (spot) to trade sideways with a positive bias, The quote range is 82.80 to 83.40,” Mr. Somaiya added.
The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.35% to 104.72.
Global oil benchmark Brent crude futures fell 0.24% to $90.43 a barrel.
In the domestic equity market, the 30-stock BSE Sensex index and the broader NSE Nifty index both rose 0.5%.
Foreign institutional investors (FIIs) turned out to be net sellers in the capital market on Friday as they offloaded shares worth Rs 224.22 crore, according to exchange data.