Mumbai, Jul 19 (PTI) The rupee depreciated by 4 paise to close at 82.08 against the US dollar on Wednesday, weighed down by the rebound in the American currency in global markets and firm crude oil prices.

Traders said domestic equity benchmarks scaling all-time high levels and sustained foreign fund inflows boosted investor sentiments and restricted the depreciating bias.

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At the interbank foreign exchange, the domestic unit opened at 82.08 against the dollar and moved between 82.07 and 82.15 against the greenback during the day.

The local unit finally settled at 82.08, down 4 paise from its previous close. The rupee had settled at 82.04 against the dollar on Tuesday.

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"In line with weak regional currencies, the rupee depreciated, after two days of gains as crude oil prices rebounded," said Dilip Parmar, Research Analyst, HDFC Securities.

The dollar index also recovered as traders assessed the US rate outlook ahead of next week's policy decision, Parmar said, adding that in the near term, spot USDINR is expected to trade within 82 to 82.30.

The rupee depreciated on a strong dollar and a surge in crude oil prices. Positive domestic equities and FII inflows supported the rupee, said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.

The US dollar surged as retail sales data showed some resilience in the US economy and a sharp decline in pound on lower-than-expected inflation.

However, disappointing industrial production and capacity utilization in the US capped sharp gains in the greenback.

"We expect the rupee to trade with a slight negative bias on the underlying strength of the dollar. Rate hike expectations by the US Federal Reserve in its upcoming FOMC meeting next week may also support the dollar.

"However, positive global markets may support Rupee at lower levels. Traders may take cues from housing market data from the US. We expect the USDINR spot to trade between 81.70 to 82.60 in the near term," Choudhary added.

According to Jateen Trivedi, VP Research Analyst at LKP Securities the rupee remained range-bound on Wednesday, while the dollar index and crude oil prices also showed little movement within their respective ranges.

The rupee experienced minor weakness due to a slight gain in the dollar.

"Participants in the rupee and dollar markets are eagerly awaiting cues from the upcoming Federal Reserve rate decision next week, which could potentially be the last rate hike as inflation has recently reached 3 per cent.

"The rupee's range is expected to continue between 81.85 and 82.25 until further clarity is provided by the Fed's decision," Trivedi said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.24 per cent to 100.17.

Brent crude futures, the global oil benchmark, advanced 0.50 per cent to USD 80.03 per barrel.

On the domestic equity market front, the 30-share BSE Sensex closed 302.30 points or 0.45 per cent higher at 67,097.44 points. The broader NSE Nifty advanced 83.90 points or 0.42 per cent at 19,833.15 points.

Foreign institutional investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth Rs 1,165.47 crore, according to exchange data.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)