The rupee settled on a flat note at 83.51 (provisional) against the US dollar on Tuesday, as the support from positive domestic markets and favourable inflation data was negated by strong US Dollar and foreign fund outflows.

Forex traders said the rupee remains under pressure due to ongoing elections as well as foreign fund outflows and the same shall subside once the results are out.

At the interbank foreign exchange market, the local unit traded in a narrow range. It opened at 83.51, and touched an intraday low of 83.52 during the day.

The domestic unit finally settled for the day at 83.51 (provisional), unchanged from its previous close.

On Monday, the rupee consolidated in a narrow range and settled flat at 83.51 against the US dollar.

"We expect the rupee to trade with a slight negative bias on the strong US dollar and a rise in crude oil prices. Sustained FII outflows may further pressure the rupee," Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.

Choudhary further noted that a positive tone in the domestic markets may support the rupee at lower levels.

Traders may take cues from PPI data from the US on Tuesday and CPI data later this week. "USDINR spot price is expected to trade in a range of Rs 83.30 to Rs 83.80," he said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was at 105.26, higher by 0.04 per cent.

Brent crude futures, the global oil benchmark, fell 0.04 per cent to USD 83.33 per barrel.

On the domestic equity market, the 30-share BSE Sensex advanced 328.48 points, or 0.45 per cent, to close at 73,104.61 points. The broader NSE Nifty settled 113.80 points, or 0.51 per cent, higher at 22,217.85.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth Rs 4,498.92 crore, according to exchange data.

On the macroeconomic front, India's retail inflation eased to an 11-month low of 4.83 per cent in April, as prices of some kitchen items declined, even though the overall food basket firmed up marginally, according to government data released on Monday.

The Consumer Price Index (CPI)-based retail inflation was 4.85 per cent in March. It was 4.7 per cent in April 2023.

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