The rupee strengthened by 8 paise to 83.44 against the US dollar early in Thursday’s session as the US currency retreated from its elevated levels. | Photo credit: C. Venkatachalapatia
The rupee strengthened by 8 paise to 83.44 against the US dollar early in Thursday’s session as the US currency retreated from its elevated levels.
Forex traders said the negative trend in domestic equities and outflow of foreign funds weighed on the local unit and restricted the upward movement.
On the interbank foreign exchange market, the local unit opened at 83.49 against the dollar. Later, it touched 83.44 on the opening note, registering an augment of 8 paise from its previous close.
The rupee remained within range on Wednesday and fell by 1 paise to 83.52 against the US dollar.
“The Indian rupee was sold against the dollar as FPIs on Wednesday continued to sell equities worth over ₹ 6,000 crore and buy dollars, keeping the US dollar on the upside,” said Anil Kumar Bhansali, director treasury and executive director Finrex Treasury Advisors LLP.
Dollar purchases may re-emerge despite the Reserve Bank of India (RBI) selling the US dollar to protect the rupee, Bhansali added.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, was trading at 105.51, or 0.03% lower.
“US Fed officials warned that interest rates could remain higher for a longer period of time. On Thursday and Friday, more speakers offered their rhetoric. The dollar index held steady at 105.54, while the US 10-year bond yield rose from 4.46% to 4.50%. Mr. Bhansali said.
Brent crude futures, the global crude oil benchmark, rose 0.43% to $83.94 a barrel.
In the domestic equity market, the 30-share BSE Sensex fell 176.2 points or 0.24% to 73,290.19 in early trade. The NSE Nifty index fell 49.75 points or 0.22% to 22,252.75 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, selling shares worth ₹ 6,669.10 crore, exchange data showed.
