The Indian rupee closed flat against the US dollar on Thursday as the market participants await for inflation data to be released.
The rupee closed little changed at Rs 83.96 after opening at Rs 83.97 against the US dollar, according to Bloomberg data. The domestic currency had closed at Rs 83.98 on Wednesday.
Inflation data is due for release on Thursday, with expectations largely in line with forecasts, suggesting a limited impact on the domestic currency, said Amit Pabari, managing director of CR Forex Advisors. "The rupee continues to hold steady within a well-defined range as the RBI remains active in managing it. The central bank has been steadily absorbing inflows, and unless the RBI eases its grip, the rupee is likely to stay within this range," he said.
The US dollar index was 0.06% higher at 101.75 at 3:41 p.m. Brent Crude was trading 1.80% higher at $71.87 per barrel. Oil prices held onto their gains from Wednesday as Hurricane Francine battered crucial oil-producing areas in the US Gulf of Mexico, leading traders to reassess and cover their bearish positions.
The market will also keep a close eye on the upcoming US PPI data and weekly jobless claims report—positive results here could bolster the dollar index's hold around the 102 mark, said Pabari. "Market expectations have now shifted towards a more conservative 25 basis point cut."
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