Mumbai: The rupee pared initial gains and settled 3 paise lower at 77.63 (provisional) against the US dollar Friday, in line with a muted trend in domestic equities.
Forex traders said persistent foreign fund outflows and widening trade deficit weighed on the local unit.
At the interbank foreign exchange market, the rupee consolidated in a narrow range. It opened at 77.47 against the greenback and finally settled at 77.63, down 3 paise over its previous close.
During the session, the rupee touched an intra-day low of 77.66 and a high of 77.47.
On Thursday, the rupee had settled at 77.60.
“The rupee erased opening gains as equities turned down while crude oil prices remained firm. Foreign fund outflows and widening trade balance weighed on the local unit,” said Dilip Parmar, Analyst, HDFC Securities.
Parmar further said, “We believe spot USD-INR will consolidate in the range of 77.44 to 77.74. Short-term traders should wait for the range breakout above 77.74 which can pave way for 78 and 78.30 while breaking below 74.44 push it towards 77.”
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03 per cent lower at 101.79.
Global oil benchmark Brent crude futures dipped 0.47 per cent to USD 117.06 per barrel.
On the domestic equity market front, the 30-share BSE Sensex ended 48.88 points or 0.09 per cent lower at 55,769.23, while the broader NSE Nifty declined 43.70 points or 0.26 per cent to 16,584.30.
Foreign institutional investors remained net sellers in the capital market Thursday as they offloaded shares worth Rs 451.82 crore, as per stock exchange data.