Rupee gains 2ps to 88.58/$

Mumbai: The rupee closed 2 paise higher at 88.58 (provisional) against the US dollar, aided by buying momentum in domestic equity markets and lower crude oil prices overseas.

Forex traders said a strong American currency and outflow of foreign capital prevented a sharp gain in the rupee even as investors were concerned about the progress on the proposed India-US trade deal.

At the interbank foreign exchange market, the rupee opened at 88.57 and hit an intra-day high of 88.41 against the greenback. The domestic unit settled the day at 88.58 (provisional) against the dollar, logging a marginal gain of 2paise from its previous closing level.

On Tuesday, the rupee settled 1paisa lower at 88.60 against the US dollar. “We expect the rupee to trade with a slight positive bias on rise in risk appetite in global markets and trade deal optimism. However, strong dollar and fading rate cut expectations may cap the upside.

Dollar demand from importers and FII outflows may pressurise the rupee at higher levels. USD-INR spot price is expected to trade in a range of Rs 88.25 to Rs 88.70,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.18 per cent higher at 99.63. Brent crude, the global oil benchmark, declined 0.46 per cent to USD 64.58 per barrel in futures trade.