Rupee settles 4 paise lower at ₹88.78 against US dollar

The rupee fell 4 paise to close at ₹88.78 (provisional) against the US dollar on Tuesday, weighed down by a strong American currency overseas and unabated foreign capital outflows.

The domestic currency traded in a tight range as investors preferred to remain on the sidelines amid uncertainties over global trade, forex traders said.

At the interbank foreign exchange market, the rupee opened with a marginal gain at ₹88.72 against the US dollar and touched the intra-day low of ₹88.79 and a high of ₹88.79 before ending the session at ₹88.78 (provisional), registering a loss of 4 paise from its previous closing level.

On Monday, the rupee gained 5 paise to settle at ₹88.74 against the US dollar.

Investors moved cautiously after the US Senate once again rejected both Democratic and Republican proposals to fund the government, prolonging the government shutdown into its sixth day.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, increased 0.34% to ₹98.13.

Brent crude, the global oil benchmark, was trading 0.37% lower at USD 65.25 per barrel in futures trading.

Commerce and Industry Minister Piyush Goyal on Tuesday said India and the US are in continuous dialogue on the proposed bilateral trade agreement, and all possibilities are there to meet the November deadline for concluding the talks.

Goyal's comment came a day after External Affairs Minister S Jaishankar said that any trade deal between India and the US must respect New Delhi's "red lines", and efforts are underway to reach an understanding.

According to Jaishankar, there were "issues" between India and the US, and many of them were linked to the inability to firm up the proposed trade deal, even as he noted that "there are things you can negotiate and there are things you can't."

In the domestic equity markets, Sensex climbed 136.63 points or 0.17% to settle at 81,926.75, while Nifty went up 30.65 points or 0.12% to 25,108.30.

Foreign institutional investors offloaded equities worth ₹313.77 crore on a net basis on Monday, according to exchange data.