Image used for representational purpose.
| Photo Credit: Reuters

The rupee consolidated in a narrow range and settled for the day 3 paise higher at 83.58 (provisional) against the U.S. dollar on July 16, on firm domestic markets and sustained inflow of foreign capital.

Forex traders said a decline in crude oil prices favoured the rupee, while a strong U.S. dollar capped sharp gains.

At the interbank foreign exchange market, the local unit opened at 83.59, and touched an intraday high of 83.53 and a low of 83.60 against the dollar during the trading session.

It finally settled at 83.58 (provisional) against the American currency, registering a gain of 3 paise from its previous close.

On Monday, the rupee depreciated 10 paise to 83.61 against the U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally higher by 0.11% at 104.29.

“The U.S. dollar gained on positive U.S. markets and a surge in U.S. treasury yields on rising expectations that Donald Trump may be re-elected as the President of the United States in the upcoming elections in November,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Brent crude futures, the global oil benchmark, were trading 0.68% lower at $84.27 per barrel.

“We expect the rupee to trade with a slight negative bias on the strong U.S. dollar and weak Asian currencies. However, a decline in crude oil prices and continued foreign inflows may support the rupee at lower levels,” Mr. Choudhary said, adding that any intervention by the RBI may also support the local unit.

In the domestic equity market, the 30-share BSE Sensex ended the day 51.69 points, or 0.06%, higher at 80,716.55 points. The broader NSE Nifty settled 26.30 points, or 0.11%, higher at 24,613.00 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday, as they purchased shares worth ₹2,684.78 crore, according to exchange data.

Meanwhile, India’s merchandise exports in June increased 2.56% to $35.2 billion despite global challenges, even as the trade deficit widened to $20.98 billion during the month.

On the price front, wholesale inflation in the country surged to a 16-month high of 3.36% in June on account of a rise in prices of food articles, especially vegetables and manufactured items.