The rupee started the New Year on a muted note, declining 14 paise to close at 82.75 (provisional) against the US dollar on Monday as rising crude oil prices and sustained foreign fund outflows weighed on investor sentiment.
Forex traders said the support from firm domestic equities and weak American currency was negated by the gains in crude oil prices and sustained foreign fund outflows.
At the interbank foreign exchange market, the rupee opened lower at 82.66 against the greenback and witnessed an intra-day high of 82.56 and a low of 82.78.
It finally settled at 82.75, down 14 paise over its previous close.
On the last trading day of 2022, the rupee had settled at 82.61.
"The Indian rupee started the first trading day of the new year with a small loss as many markets remained closed on account of the New year Holiday.
"The rupee was unable to hold the morning gains in absence of inflows. The thin trading volumes, stronger domestic equities and better-than-expected PMI readings were falling short to support the rupee," said Dilip Parmar, Research Analyst, HDFC Securities.
The near-term focus will remain on the Federal Open Market Committee (FOMC) meeting minutes, scheduled to be released on Wednesday.
"Spot USD-INR is still stuck in a three-week range of 82.50 to 82.95. We believe the said range could be resolved by the weekend as liquidity returns with traders coming back to their desks after the New Year holiday," Parmar added.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.30 per cent lower at 103.52.
Global oil benchmark Brent crude futures rose 2.94 per cent to USD 85.91 per barrel.
The 30-share BSE Sensex ended 327.05 points or 0.54 per cent higher at 61,167.79, while the broader NSE Nifty climbed 92.15 points or 0.51 per cent to 18,197.45.
Foreign institutional investors (FIIs) remained net sellers in the capital market on Friday, as they offloaded shares worth Rs 2,950.89 crore, as per stock exchange data.
Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.
