The rupee pared initial gains and settled 3 paise lower at 77.63 (provisional) against the US dollar on 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.