Rupee Choppy Amidst Weak Domestic Equities and Global Market Fluctuations

The rupee settled 1 paisa lower at 83.50 against the US dollar on Monday, pressured by muted domestic equities despite benefits from a weak dollar and declining crude oil prices. The domestic markets saw mixed results while the dollar index slightly rose and forex reserves dropped.

The rupee closed 1 paisa down at 83.50 against the US dollar on Monday, as muted domestic equities impacted investor sentiment.

At the interbank foreign exchange market, the local currency opened at 83.45, peaking at 83.44 and dipping to a low of 83.50 during the session.

Ultimately, it concluded at 83.50 against the dollar, marking a 1 paisa loss from the previous close of 83.49.

Forex traders indicated the rupee gained traction from a weaker dollar and lower crude oil prices, though weak domestic markets applied pressure.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, stated, "The US Dollar fell following a disappointing non-farm payrolls report, raising expectations of a rate cut by the US Federal Reserve in its September FOMC meeting."

Meanwhile, the dollar index, measuring the greenback's strength against six currencies, traded at 104.90, a 0.03% increase.

Brent crude futures, the global oil benchmark, fell by 0.88% to USD 85.78 per barrel.

Choudhary projected a slight positive bias for the rupee based on a weak dollar tone and Foreign Institutional Investor (FII) inflows, but noted that domestic market corrections and political uncertainty in France might limit gains.

The domestic equity market saw the 30-share BSE Sensex finish 36.22 points (0.05%) lower at 79,960.38, while the broader NSE Nifty rose by 3.30 points (0.01%) to 24,320.55.

On Monday, FIIs were net buyers in the capital markets, purchasing shares worth Rs 60.98 crore, according to exchange data.

India's forex reserves declined by USD 1.713 billion to USD 651.997 billion for the week ending June 28, the RBI reported.

(With inputs from agencies.)