Rupee rebounds from all-time lows; closes 14 paise up at 82.99 against US dollar

New Delhi: The rupee recovered from its all-time low levels and settled higher by 14 paise at 82.99 against the US dollar on Tuesday, as the American currency retreated from its elevated levels.

Forex traders said the rupee appreciated tracking a weak tone in the US dollar. However, selling pressure by foreign investors amid risk aversion in global markets dented sentiments.

At the interbank foreign exchange market, the local unit opened at 83.07 against the US dollar and moved in a range of 82.93 to 83.09 in the day trade.

The rupee finally settled 14 paise higher at 82.99 against the previous close.

On Monday, the rupee depreciated by 3 paise and settled at an all-time low of 83.13 against the US dollar.

The Indian rupee appreciated on the weak US dollar and positive domestic markets. The decline in crude oil prices also supported the rupee, while selling pressure by foreign investors capped sharp gains, said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

The US dollar declined on positive Asian and European markets and strong euro and pound.

"We do not see any sharp appreciation in the rupee as we expect the US dollar to recover amid the hawkish tone of the US Federal Reserve and continued selling pressure from FIIs," Choudhary said.

"However, a rise in risk appetite in global markets may support rupee at lower levels. US 10-year treasury yields rose to the highest levels since November 2007 on expectations of higher interest rates.

"Investors may remain cautious ahead of the BRICS summit and Fed Chair, Jerome Powell's speech at Jackson Hole Symposium this week. USDINR spot price is expected to trade in a range of Rs 82.70 to Rs 83.30," Choudhary added.

Dilip Parmar, Research Analyst, HDFC Securities, said, "The Indian rupee appreciated versus the US dollar, after broadly consolidating in a narrow range for the last four days.

"The rupee is within a whisker of a record low, but the central bank intervention in anticipation of large inflows from the primary market supporting the local unit in the near term." In the short term, spot USDINR is expected to consolidate between 82.80 to 83.15 while the medium-term trend remains bullish as long as it trades above 82.50, Parmar said.

"Rupee continued to trade in a narrow range and volatility remained low ahead of the important Jackson Hole Symposium that is scheduled later this week. Market participants await for cues particularly from the Fed Chairman and any hawkish comments could strengthen the dollar against its major crosses," Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial Services said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.16 per cent to 103.13.

Brent crude futures, the global oil benchmark, declined 0.51 per cent to USD 84.03 per barrel.

On the domestic equity market front, the BSE Sensex closed 3.94 points or 0.01 per cent higher at 65,220.03. The broader NSE Nifty advanced 2.85 points or 0.01 per cent to 19,396.45.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 495.17 crore, according to exchange data.