Traders said the local currency is trading in a narrow range against the US dollar ahead of the US Federal Reserve meeting this week.
The rupee edged 4 paise higher at 72.93 against the US dollar in opening trade on Monday, tracking positive domestic equities and weak American currency.
Traders said the local unit is trading in a narrow range against the US dollar ahead of the US Federal Reserve meeting this week.
At the interbank forex market, the domestic unit opened at 72.95 against the US dollar and inched higher to 72.93 against the greenback, registering a rise of just 4 paise over its previous close.
On Friday, the rupee had settled at 72.97 against the American currency.
“We are likely to see some positioning adjustments across domestic equities, bonds and rupee in the holiday shortened week, leading up to the budget on February 1. The economic survey would be tabled a day prior,” Abhishek Goenka, Founder and CEO, IFA Global said.
“On the global front, the focus this week will be on the US Federal Reserve monetary policy due late Wednesday evening,” Goenka said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.13 per cent to 90.12.
“Asian currencies were mixed against the greenback ahead of the Fed meeting this week,” Reliance Securities said in a research note.
The euro and the sterling have started marginally weaker against the US dollar this Monday morning in Asian trade. The Japanese yen was marginally weak against the US Dollar in morning trade.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 34.21 points higher at 48,912.75, and the broader NSE Nifty was up 10.05 points at 14,381.95.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 635.69 crore on a net basis on Friday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.07 per cent to $55.37 per barrel.
The domestic currency is likely to strengthen 1.3 per cent and average 73.5 against the US dollar in the financial year 2022-23 compared with an average level of 74.4 in the financial year 2021-22. The domestic currency may strengthen marginally against the US dollar next year.