Indian rupee weakens further against UAE dirham

The Indian rupee started on a muted note and slipped six paise to 76.21 against the US dollar (20.76 against the UAE dirham) in early trade on Wednesday, tracking the strength of the dollar in the overseas market and weak Indian macroeconomic data.

At the Indian interbank foreign exchange, the rupee opened at 76.15 against the dollar and moved in a narrow range.

It touched an early low of 76.21 in initial deals.

On Tuesday, the rupee fell 24 paise to close at 76.15 against the greenback.

Meanwhile, global oil benchmark Brent crude futures fell 0.23 per cent to $104.40 per barrel.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.02 per cent to 100.31.

According to Sriram Iyer, senior research analyst at Reliance Securities, the rupee could remain range-bound in Wednesday's session.

"The US CPI was in line with expectation and weighed on US bond yields and could lend support, however reassurance by one of the Fed members on rate hikes continued to lift the dollar and could cap appreciating bias of the local unit," Iyer noted.

Additionally, a surge in CPI and core inflation numbers will cap the appreciating bias of the local unit, Iyer added.

According to official data released on Tuesday, retail inflation soared to a 17-month high of 6.95 per cent in March, continuing to remain above the Reserve Bank's upper tolerance level, while factory output grew just 1.7 per cent in February.

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On the Indian equity market front, the 30-share Sensex was trading 73.32 points or 0.13 per cent higher at 58,649.69, while the broader NSE Nifty advanced by 29.70 points, or 0.17 per cent, to 17,560.

(with inputs from PTI)

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