The rupee recovered 13 paise to close at 71.85 against the US dollar on Tuesday, provisional market data suggests, amid easing crude oil prices and weakening of the dollar in overseas market.
Forex traders said that weak dollar and easing crude oil prices supported the rupee, but losses in domestic stocks and foreign fund outflows weighed on the domestic currency and limited its upmove.
At the interbank foreign exchange market, the rupee had opened on a positive note at 71.84, and touched a high of 71.78 and low of 71.90 during the day.
The rupee cut short its three-day losing run, with today’s positive close. The domestic unit had settled at 71.98 against the American currency on Monday.
“The rupee started the day strong on back of firm opening of stocks, selling by exporters and a weak dollar,” said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.
CR Forex Advisors, a forex advisory firm, said, “Going forward, it is less likely that the rupee-dollar pair will depreciate beyond its one-year high of 72.40 levels before March. The RBI had bought aggressively near 71.10-20 levels to build up reserves and therefore there is a high possibility that the apex bank will sell on any rise above 72.00-72.20 mark in order to book profit and also keep fiscal deficit in check.