Mumbai, Aug. 17 (PTI): The rupee on Tuesday declined by 11 paise to close at 74.35 against the US currency due to a stronger dollar in the overseas markets.
At the interbank foreign exchange market, the domestic currency opened flat at 74.23 against the American currency but later slipped to close at 74.35.
"Rupee opened on a flat note but fell in the latter half of the session following weakness in domestic equities. Broader strength in the dollar against its major crosses also weighed on the currency," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.
Somaiyaa said that market participants are awaiting for more cues from the Federal Reserve meeting minutes that would be released this week.
Investors will focus on the retail sales number that will be released from the US. Weaker-than-expected number could keep gains capped for the dollar, he said adding that "we expect the USDINR (Spot) to trade sideways with a positive bias and quote in the range of 74.05 and 74.50."
During the session, the local unit touched an intra-day high of 74.21 and a low of 74.36 against the US currency. On Friday, the rupee had settled at 74.24 against the US dollar.
The forex market was closed on Monday on account of 'Parsi New Year'.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent higher at 92.68.
Brent crude futures, the global oil benchmark, fell 0.37 per cent to USD 69.25 per barrel.
On the domestic equity market front, the BSE Sensex ended 209.69 points or 0.38 per cent higher at 55,792.27, while the broader NSE Nifty advanced 51.55 points or 0.31 per cent to 16,614.60.
Meanwhile, foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth INR1,088.32 crore, according to the exchange data.
According to Dilip Parmar, Research Analyst, HDFC Securities, Indian rupee erased opening gains amid the recovery in the dollar index and dollar demand from importers.
"Markets are struggling to hold onto key themes, be it the better-than-expected economic data, virus infections, or a risk-averse sentiment. Traders are looking for fresh themes for a clear directional trade," Parmar said.