The Indian rupee strengthened by 13 paise to conclude at 82.83 against the US dollar on Thursday, supported by the greenback’s weakness in the global market and positive trends in domestic equities. Despite facing pressure from elevated crude oil prices, the local currency managed to register gains, albeit limited.
At the interbank foreign exchange, the rupee commenced trading at 82.94 against the US dollar. Throughout the trading session, it touched an intraday high of 82.83 before settling at the same level, marking an uptick of 13 paise from the previous closing rate of 82.96.
According to Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, the Indian rupee’s appreciation can be attributed to the weakening US dollar and the mixed-to-positive sentiment prevailing in the domestic markets. However, the surge in crude oil prices acted as a deterrent to sharper gains. The decline in the US dollar was driven by an increase in global risk appetite and positive performance in European markets ahead of key economic data releases.
The retreat of the dollar index, which measures the greenback’s strength against a basket of major currencies, further bolstered the rupee’s position. The index was reported to be trading 0.31% lower at 103.68. Concurrently, Brent crude futures, the global oil benchmark, experienced a modest increase of 0.37%, reaching USD 83.34 per barrel.
Looking ahead, Choudhary emphasized that the rupee is likely to maintain a slightly positive bias due to the weak stance of the US dollar and favorable trends in global markets. However, potential constraints could arise from escalating global crude oil prices and geopolitical tensions in the Middle East. Traders are advised to monitor key economic indicators from the US, including manufacturing and services PMI, weekly unemployment claims, and existing home sales data, which could impact currency movements.
On the domestic front, the equity markets witnessed a bullish trend, with the Sensex surging 535.15 points, or 0.74%, to reach 73,158.24. Similarly, the Nifty climbed 162.40 points, or 0.74%, setting a new all-time high at 22,217.45. Foreign Institutional Investors (FIIs) maintained a positive stance in the capital markets on Wednesday, recording net purchases of shares worth Rs 284.66 crore, as per exchange data.
Overall, the rupee’s performance reflects the complex interplay of global economic factors and domestic market dynamics, with investors closely monitoring developments to navigate currency fluctuations effectively.