Mumbai, February 25 The rupee remained within a narrow range on Wednesday for the second consecutive day, closing at 90.96 (provisional) against the US dollar, amid higher global crude oil prices and foreign fund outflows.
Forex traders attributed the rupee's stability to a weaker US dollar and positive sentiment in domestic equity markets.
At the interbank foreign exchange market, the rupee opened at 90.94 against the dollar and traded within a narrow range throughout the day, before closing at 90.96 (provisional), down 1 paisa from its previous close.
On Tuesday, the rupee closed at 90.95 against the US dollar.
"The rupee strengthened in the early trading hours due to a weaker dollar and a positive start to the domestic market. However, it reversed its gains due to elevated crude oil prices and geopolitical tensions," said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.
"We expect the rupee to trade negatively amid geopolitical tensions between the US and Iran, as well as the ongoing trade tariff uncertainty. Negotiations between the US and Iran are likely to take place on Thursday, and the market expects that the US may opt for a limited attack on Iran," he added.
Meanwhile, the dollar index, which measures the strength of the US dollar against a basket of six currencies, was down 0.05 per cent at 97.79.
"A weaker dollar, along with RBI intervention, may support the rupee at lower levels. The USD-INR spot price is expected to trade in a range of Rs 90.70 to Rs 91.20," Choudhary said.
Brent crude, the global oil benchmark, rose 0.06 per cent to USD 70.76 per barrel in futures trade.
Domestic equity markets rebounded on Wednesday, with the Sensex climbing 50.15 points to close at 82,276.07, while the Nifty rose 57.85 points to 25,482.50.
On Tuesday, foreign institutional investors offloaded equities worth Rs 102.53 crore, according to exchange data.
