Rupee closes 9 paise higher at 82.21 against US dollar
The US dollar remained under pressure, weighed down by the risk of a US default as a standoff between Democrats and Republicans over raising the debt ceiling showed few signs of being resolved.
PremiumThe Indian rupee closed 9 paise higher against the US dollar Tuesday amid a weaker dollar and improving economic data. The rupee ended at 82.21 to the US dollar compared with the previous close of 82.30.
The dollar paused its recent rally and slipped from five-week highs amid worries over weak US economic data and the country's debt ceiling.
“The rupee's movement is mostly tied to global worries like US debt ceiling, which is impacting the dollar index," said Jateen Trivedi, analyst at LKP Securities.
Expect rupee to broadly trade between 81.80-82.40 levels, Trivedi said.
Meanwhile, India’s merchandise trade deficit declined to $15.2 billion in April from $19.7 billion in the previous month. The merchandise and services deficit fell to a 21-month low of $1.38 billion.
Easing domestic inflation and better-than-expected trade deficit numbers bode well for the rupee, analysts said.
However, the analysts said plans by the United States to purchase oil for its Strategic Petroleum Reserve might act as a concern for the rupee as it has benefitted from a fall so far this year.
Crude prices have fallen nearly 13% so far this year.
Rising oil prices could remain a concern for the local unit, making a clear room for the USD/INR pair to move above 82.50– 82.80 levels, CR Forex Advisors said in a note.
(With inputs from PTI)
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