By Sethuraman N R
MUMBAI (Reuters) – The Indian rupee on Tuesday saw its first gain in four sessions as a slightly weaker dollar and improving economic data
supported the local currency.
The rupee closed at 82.2050 against the U.S. dollar, up from 82.2950 in the previous session. The rupee had dropped to a six-week low of 82.3725 on Monday.
The dollar, which paused its recent rally and slipped from five-week highs, seesawed on Tuesday amid worries over weak U.S. economic data and the country’s debt ceiling.
The rupee’s movement is mostly tied to global worries like U.S. 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 in April dropped to $15.2 billion from $19.7 billion in the previous month.
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.
(Reporting by Nallur Sethuraman in Mumbai; Editing by Sohini Goswami)
