On Friday, the rupee started the day on a positive note by gaining 4 paise against the US dollar, reaching 81.75 in early trade. The rise is attributed to the weakened American currency and increased foreign fund inflows. Forex traders suggest that the rupee is trading in a narrow range, and the support from crude oil prices below USD 80 a barrel was offset by muted domestic equities.
The rupee opened at 81.77 against the dollar at the interbank foreign exchange and then climbed to 81.75, indicating a 4 paise increase compared to its previous close. On Thursday, the rupee had closed at 81.79 against the US currency.
At the same time, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose slightly by 0.01 per cent to 101.51. The global oil benchmark, Brent crude futures, increased by 0.27 per cent to USD 78.58 per barrel.
Traders suggest that investors are waiting for cues from key domestic macroeconomic data that is expected to be released soon. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, stated that “the important data to be released are EuroZone GDP, BOJ monetary policy statement, India Fiscal deficit and FX reserves, US Michigan Consumer sentiment, US personal income, and core PCE price index.”
In the domestic equity market, the 30-share BSE Sensex experienced a decline of 62.14 points or 0.10 per cent to 60,587.24, and the broader NSE Nifty fell 10.30 points or 0.06 per cent to 17,904.75.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Thursday, purchasing shares worth Rs 1,652.95 crore, according to exchange data.
In conclusion, the rupee’s rise against the US dollar can be attributed to the weakened American currency and increased foreign fund inflows. However, the rupee’s gain was negated by muted domestic equities. Investors are waiting for key domestic macroeconomic data to be released, and foreign institutional investors continue to remain net buyers in the capital market.
