Rupee gains against US dollar

NEW DELHI: The rupee rose by 9 paise to 65.64 against the US dollar in early trade on Tuesday. The domestic currency had settled 6 paise lower at 65.73 against the US dollar in the previous session on fresh dollar demand from banks and importers.

Foreign capital flows into the domestic equity market restricted the rupee’s fall against the US currency, forex dealers said. Weakness was seen in the dollar against major global currencies on Tuesday. The dollar index, which tracks the movement of the dollar against a basket of six major world currencies, stood at 95.80.

“The strength in dollar will depend on how forex flows move. As things stand, we are going to see a pullback in forex flows. We will continue to get inflows from abroad and that will ensure that the rupee remains reasonably stable. RBI will not allow excess appreciation and, to that extent, the rupee may thus see a sideways move,” said Mythili Bhusnurmath, Consulting Editor at ET Now.

Among global cues, Atlanta Federal Reserve president Dennis Lockhart will deliver a speech in Alabama, US, later in the day. German PPI ( producer price index) and figures on the US housing price index will also be keenly watched.