The Indian rupee continued its upward trend, gaining 3 paise to close at 83.33 (provisional) against the US dollar on Tuesday. Positive domestic market sentiments and a weaker American currency contributed to the rupee’s appreciation.
Starting the day at 83.37 against the greenback at the interbank foreign exchange market, the rupee reached an intra-day high of 83.28 and a low of 83.39. Ultimately, it settled at 83.33, marking a 3 paise increase from its previous close. This follows an 8 paise appreciation on Monday, where the rupee closed at 83.36 against the US dollar.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, commented on the factors influencing the rupee’s movement, “The Indian rupee appreciated on Tuesday due to a weak US dollar and positive domestic markets. However, a recovery in crude oil prices and Foreign Institutional Investors (FII) outflows limited the sharp gains.”
The dollar index, which measures the greenback’s strength against a basket of six major currencies, was trading 0.01% lower at 106.06. This decline was attributed to easing tensions between Israel and Iran. Meanwhile, Brent crude futures, the global oil benchmark, advanced 0.29% to USD 87.25 per barrel.
Choudhary further added, “We expect the rupee to trade with a slight positive bias, driven by improved global risk sentiments and the easing of geopolitical tensions in the Middle East.” The rupee also received support from a stronger euro and pound, coupled with mixed to positive PMI data from Europe.
However, Choudhary cautioned, “Any fresh aggressions in the Middle East could cap sharp upside movements. Traders will also be keeping an eye on PMI data from the US and may remain cautious ahead of inflation data due later this week.” He predicted that the USD-INR spot price could trade within a range of Rs 83.10 to Rs 83.50.
On the domestic equity market front, the Sensex advanced by 89.83 points, or 0.12%, settling at 73,738.45 points. Similarly, the Nifty rose by 31.60 points, or 0.14%, closing at 22,368.00 points. Foreign Institutional Investors (FIIs) were net sellers on Monday, offloading shares worth Rs 2,915.23 crore, according to exchange data.
The rupee’s performance reflects the dynamic interplay of global economic factors, geopolitical developments, and domestic market sentiments. As investors and analysts continue to monitor these variables, the rupee’s movement against the dollar is likely to remain a focal point in the coming days.