Bearish local equities and capital outflows constrained the rupee, a forex dealer said. (Agencies)
The rupee opened lower at 62.40 a dollar from on Monday's close of 62.31 and declined further to a low of 62.47 on early dollar demand from importers and weakness in domestic stocks. Later, it bounced back to 62.29 on late dollar selling by exporters before ending at 62.30, a rise of one paisa.
"Tuesday witnessed some range-bound trading session with markets awaiting inflation data. 62.50 continues to remain a critical resistance during the day," Admisi Forex India Pvt said in a note.
The benchmark 30-share S&P BSE Sensex tumbled 94.06 points on Tuesday, its fifth straight session of losses. Overseas investors sold a net Rs 567.02 crore of shares on Tuesday, according to provisional exchange data. They pulled out USD 41.35 million on Monday, according to Sebi data.
The euro firmed up against the dollar after data showed a pullback of euro-zone inflation, helping the rupee to recover some of its early losses. German economic data came in better than expected.
The dollar index, which measures the US currency against six major global rivals, was trading at its overnight closing level.
"Rupee traded range bound and ended near on Monday's close as dollar index is also trading in a tight range near its previous close," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India).
The government is inclined to keep curbs on gold imports until the end of March to contain the current account deficit, Economic Affairs Secretary Arvind Mayaram said.
Bearish local equities and capital outflows constrained the rupee, a forex dealer said.