Mumbai, Sep 14 (PTI) The rupee pared its early gains to close flat at 73.68 against the US currency on Tuesday due to inflationary concerns and a muted trend in domestic equities.
The US dollar regaining strength ahead of the release of US inflation data and high crude oil prices also restricted gains in the rupee, analysts said.
At the interbank foreign exchange market, the local currency opened higher at 73.62 and touched an intra-day high of 73.57. However, the unit gave up gains later to hit a low of 73.70 before settling flat at 73.68 against the greenback.
Snapping the two-month easing trend, wholesale price-based inflation rose to 11.39 per cent in August and remained in double-digit for the fifth consecutive month, official data released on Tuesday showed.
While food prices eased, high fuel and power and manufactured goods prices pushed headline inflation high, raising concerns of spillover to consumer prices.
"The Indian Rupee ended flat against the dollar this Tuesday ahead of inflation data from the world''s largest economy that may provide more cues on the US Federal Reserve''s taper timeline," said Sriram Iyer, Senior Research Analyst at Reliance Securities.
A weak risk appetite in the global equity markets and weaker emerging market and Asian currencies kept the currency appreciation bias limited, Iyer added.
According to Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services, the rupee consolidated in the first half of the session but fell as the dollar strengthened against its major crosses in the later half.
"The greenback rose ahead of the important inflation number that will be released later today from the US. Expectation is that inflation could rise marginally in comparison to the previous month. We expect the USDINR (Spot) to trade sideways with a positive bias and quote in the range of 73.20 and 73.80," Somaiyaa said.
The dollar index, which gauges the greenback''s strength against a basket of six currencies, was trading marginally down at 92.61.
Brent crude futures, the global oil benchmark, rose 0.67 per cent to USD 74 per barrel.
On the domestic equity market front, the BSE Sensex ended 69.33 points or 0.12 per cent higher at 58,247.09, while the broader NSE Nifty advanced 24.70 points or 0.14 per cent to 17,380.00.
Foreign institutional investors were net buyers in the capital market on Monday as they purchased shares worth Rs 1,419.31 crore, as per exchange data. PTI DRR MR