The rupee started on a muted note and slipped 6 paise to 76.21 against the US dollar in early trade on Wednesday, tracking the strength of the dollar in the overseas market and weak domestic macroeconomic data. At the interbank foreign exchange, the rupee opened at 76.15 against the American dollar and moved in a narrow range. It touched an early low of 76.21 in initial deals.
On Tuesday, the rupee fell 24 paise to close at 76.15 against the US dollar. Meanwhile, global oil benchmark Brent crude futures fell 0.23 percent to USD 104.40 per barrel.
The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.02 percent to 100.31. According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee could remain rangebound in Wednesday's session.
"The US CPI was in line with expectation and weighed on US bond yields and could lend support, however reassurance by one of the Fed members on rate hikes continued to lift the dollar and could cap appreciating bias of the local unit," Iyer noted. Additionally, a surge in domestic CPI and core inflation number will cap appreciating bias of the local unit, Iyer added.
According to official data released on Tuesday, retail inflation soared to a 17-month high of 6.95 percent in March, continuing to remain above the Reserve Bank's upper tolerance level, while factory output grew just 1.7 percent in February. On the domestic equity market front, the 30-share Sensex was trading 73.32 points or 0.13 percent higher at 58,649.69, while the broader NSE Nifty advanced by 29.70 points, or 0.17 percent, to 17,560.
Foreign institutional investors remained net sellers in the capital market on Tuesday as they offloaded shares worth Rs 3,128.39 crore, according to stock exchange data.
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