Rupee trades in narrow range against US dollar in early trade

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The rupee traded in a narrow range against the US dollar in early trade on Thursday as the support from fresh foreign fund inflows was negated by trade deal uncertainty and risk-off sentiment.

Forex traders said lack of progress in the India-US trade negotiations and strong dollar demand from corporates and importers weighed on the local unit, even as Brent crude prices hovering near USD 60 per barrel supported investor sentiment.

At the interbank foreign exchange market, the rupee opened at 90.35 against the US dollar, then gained some ground and touched 90.32 against the US dollar. In initial trade it also touched 90.38 against the American currency.

On Wednesday, the rupee recovered 55 paise from its all-time low level to close at 90.38 against the greenback.

"The PSU banks were the sellers of dollars on Wednesday on behalf of the RBI. The intervention amount could have been as high as USD 6 billion," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

"We expect the range of 90 to 91.00 on Thursday with 90.25 as support and 90.75 as resistance," Bhansali added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.05 per cent higher at 98.41.

Brent crude, the global oil benchmark, was trading higher by 0.67 per cent at USD 60.08 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex was trading 114.06 points lower at 84,445.59, while the Nifty was down 41.10 points at 25,777.45.

Foreign Institutional Investors purchased equities worth Rs 1,171.71 crore on Wednesday, according to exchange data.

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