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The rupee appreciated by 10 paise to 82.21 against the US dollar on Tuesday (May 16) as the American currency retreated from its higher levels.
Forex traders said significant foreign fund inflows and easing crude prices also supported the local unit.
At the interbank forex market, the local unit opened at 82.22 against the American currency and moved between a high of 82.16 and a low of 82.29 in the day’s trade.
The local unit settled at 82.21 (provisional), registering a gain of 10 paise over its previous close. On Monday, the rupee had closed at 82.31 against the American currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.14% to 102.28.
Global oil benchmark Brent crude futures fell 0.29% to $75.01 a barrel.
Dilip Parmar, Research Analyst, HDFC Securities, said a weaker greenback, strong foreign fund inflows and lower crude prices supported the rupee after falling in the last three days.
The local unit outperforms Asian currencies as trade deficit narrows to 21-month low.
Though the rupee outperformed among Asian currencies, the range remained narrow ahead of the US debt ceiling talks. It is widely expected that no agreement will be reached and that the current uncertainty will continue, making the haven asset volatile.
In the near term, the spot USD-INR has resistance near 82.50 and support near 82.05.
On the domestic equity market front, 30-share BSE Sensex down 413.24 points or 0.66% to end at 61,932.47, and the broader NSE Nifty fell 112.35 points, or 0.61%, to 18,286.50.
Foreign institutional investors (FIIs) were net buyers in the capital market on Monday as they bought shares worth Rs 1,685.29 crore, according to exchange data.