Indian rupee trades in narrow range against UAE dirham

The Indian rupee witnessed range-bound trading on Tuesday morning as firming oil prices and concerns about the hawkish US Federal Reserve offset the support from the overnight weakness of the American currency.

At the Indian interbank foreign exchange, the rupee opened at 79.73 against the dollar and moved in a narrow range. It touched an early low of 79.79 in initial deals.

On Monday, the rupee rose by 12 paise to close at 79.78 against the dollar.

Traders said the rupee opened marginally stronger on Tuesday morning, tracking the overnight weakness of the dollar. However, muted Indian equities and foreign fund outflows weighed on the rupee.

Investors will await fresh triggers this week from the US Fed event and could refrain themselves from taking large positions, said Sriram Iyer, senior research analyst at Reliance Securities.

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But, higher oil prices, global growth fears and a hawkish Fed could keep appreciation bias capped, Iyer noted.

Experts believe the dollar may bounce back on expectations of a hawkish US Fed and an aggressive rate hike in the Federal Open Market Committee (FOMC) meeting later this week.

On the Indian equity front, the 30-share Sensex was trading 330.79 points or 0.59 per cent lower at 55,435.43, while the broader NSE Nifty fell 100.15 points or 0.6 per cent to 16,530.85.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.10 per cent to 106.37.

Global oil benchmark Brent crude futures rose 1.31 per cent to $106.61 per barrel.

Foreign institutional investors remained net sellers in the capital market on Monday, offloading shares worth Rs8.44 billion, as per exchange data.

(With inputs from PTI)

• India