Rupee falls 10 paise to 83.50 against dollar

Mumbai: The rupee settled for the day lower by 10 paise at 83.50 against the US dollar on Monday, following a rising American currency in overseas markets and a sluggish trend in domestic equities.

Forex traders said the downside in the rupee was restricted by easing political uncertainties as Narendra Modi was sworn in as Prime Minister on Sunday for a record-equalling third term.

At the interbank foreign exchange, the local unit opened at 83.48 and settled for the day lower by 10 paise at 83.50 against the American currency.

On Friday, the rupee appreciated 13 paise to 83.40 against the US dollar.

“We expect the rupee to trade with a slight negative bias on strong US Dollar amid rising expectations of a delay in interest rate cut by the US Federal Reserve due to tight job market,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

However, softening crude oil prices and optimism over a stable government may support the rupee at lower levels. Traders may take cues from inflation data from India and the US.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 105.27, higher by 0.37 per cent.

Meanwhile, India’s forex reserves jumped $4.837 billion to a new all-time high of $651.51 billion for the week ended May 31, the RBI said on Friday. In the previous reporting week, the overall reserves had dropped $2.027 billion to $646.673 billion.