Indian rupee strengthened against the US dollar on Tuesday after data showed India’s retail inflation softened marginally to 7.04% in May from an eight-year high of 7.79% in April and even it remained above the RBI's upper tolerance level of 6% for the fifth consecutive month. However, overnight strength of the American currency, elevated crude oil prices, and a continued foreign institutional investors outflow from the domestic market capped further appreciation in the rupee. Foreign institutional investors were net sellers as they offloaded shares worth Rs 4,164.01 crore in the capital market on Monday, exchange data showed. On the global front, US dollar was trading lower, but still stood near a fresh 20-year peak as investors braced for more aggressive interest rate hikes from US Federal Reserve and a possible recession.
The partially convertible currency is currently trading at 78.02, stronger by 2 paise from its previous close of 78.04 on Monday. The currency touched a high and low of 78.0725 and 77.90 respectively.
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