Image used for representational purposes only. | Photo source: REUTERS
The rupee rose by 1 paise to close at 83.32 (provisional) against the US dollar on Thursday as support from positive domestic equities was negated by continued selling pressure from overseas funds.
Forex traders said foreign capital outflow also had an impact on the rupee. However, a faint US dollar against key rivals abroad supported the domestic currency.
On the interbank foreign exchange market, the local unit opened at 83.34 against the dollar. Moving in a narrow range, the unit hit an intraday high of 83.31 and low of 83.40 against the dollar.
The local currency finally settled at 83.32 (provisional) against the dollar, 1 paise higher than the previous close.
On Wednesday, the rupee strengthened in a narrow range and fell by 2 paise to 83.33 against the US dollar.
“We expect rupee trading to be slightly negative on the back of recovery in crude oil prices and mixed with faint Asian and European markets. However, a faint dollar amid easing geopolitical tensions in the Middle East may support the rupee at lower levels,” he said. Anuj Choudhary, Sharekhan Research Analyst at BNP Paribas.
Choudhary further noted that investors can take cues from GDP forecasts, weekly unemployment claims and expected U.S. home sales data. Investors may remain cautious ahead of Friday’s inflation data. The USD/INR spot price is expected to range between ₹83.10 and ₹83.70.
Brent crude futures, the global crude oil benchmark, rose 0.05% to $88.06 a barrel.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, was at 105.60, down 0.24%.
On the domestic equity market, Sensex gained 486.50 points or 0.66% to end at 74,339.44, while Nifty rose 167.95 points or 0.75% to close at 22,570.35.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, selling shares worth ₹ 2,511.74 crore, exchange data showed.
