Rupee Steady vs US Dollar: Domestic Stocks Up, Outflows Continue

Mumbai, May 16 (PTI) The rupee opened on a flat note against the US dollar in early trade on Thursday, as the support from positive domestic equities was negated by sustained foreign fund outflows and elevated crude oil prices.

Forex traders said the rupee remains under pressure due to ongoing elections as well as foreign fund outflows and the same shall subside once the results are out.

At the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.45 against the American currency and touched 83.46.

On Wednesday, the rupee had settled at 83.46 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 104.20, lower 0.13 per cent.

Brent crude futures, the global oil benchmark, rose 0.40 per cent to USD 83.08 per barrel.

"Despite short-term pressure on the rupee due to internal factors, external conditions have turned in its favour. Recent US CPI and retail sales data indicate that inflation is resuming its downward trend," CR Forex Advisors MD Amit Pabari said.

In the short term, the rupee is expected to rise to around 83.20 to 83.00 levels, with medium-term expectations pointing to an appreciation to around 82.80 to 82.50 levels, Pabari added.

On the domestic equity market, the 30-share BSE Sensex was trading 118.73 points, or 0.16 per cent higher at 73,105.76 points. The broader NSE Nifty was up 50.50 points, or 0.23 per cent, to 22,251.05 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 2,832.83 crore, according to exchange data.