Rupee trades in narrow range against U.S. dollar in early trade

Rupee trades at 83.92 against the U.S. dollar, influenced by global market risk aversion and geopolitical tensions.

Rupee traded in a narrow range in morning trade on August 7, as the support from positive domestic equities was negated by strengthening of the American currency in the overseas market.

At the interbank foreign exchange market, the local unit opened at 83.86 but soon pared the gains to trade at 83.92, unchanged from its previous close.

On Tuesday, the rupee recovered from its all-time low level and settled for the day 17 paise higher at 83.92 against the U.S. dollar.

The local unit had slumped 37 paise to settle at an all-time low of 84.09 against the U.S. dollar on Monday.

Forex traders said risk aversion in the global markets, escalation of geopolitical tensions in the Middle East and outflows by foreign investors further dented investor sentiments.

"Indian rupee is expected to open at 83.91 after a fall to 83.96 on Tuesday with dollar demand gaining traction but RBI selling dollars to keep rupee within 84 levels," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

For the day the rupee looks to be in a range of 83.85 to 84.05 but all depending on the Reserve Bank, as to where it wants the rupee to be in the coming days, Bhansali added.