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

Indian rupee strengthens against U.S. dollar on positive macroeconomic data, despite muted equities and foreign fund outflows.

The Indian rupee traded in a tight range appreciated 3 paise to 83.94 against the U.S. dollar in early trade on Tuesday (August 13, 2024) on positive domestic macroeconomic data.

However, a muted trend in domestic equities and foreign fund outflows capped the gains for the local unit.

At the interbank foreign exchange, the rupee opened at 83.95 against the greenback and traded in a tight range. In initial trade it touched 83.94, registering a gain of 3 paise over its previous close.

On Monday (August 12, 2024), the rupee settled for the day lower by 2 paise at 83.97 against the American currency.

Forex traders said market participants are treading cautiously amid a landscape fraught with geopolitical uncertainties and a consolidating U.S. Dollar.

However, the Indian rupee is trading in a narrow range and the stability is underpinned by several factors: a narrowing fiscal deficit, stable oil prices, stronger economic growth and the RBI's substantial reserves of $675 billion, ready to be deployed if needed, CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02% lower at 103.11.