The Indian rupee showed resilience in the face of volatile markets on Wednesday, strengthening by 7 paise to settle at 82.83 against the US dollar. The currency’s upward trajectory was fueled by a weakened US dollar against major global currencies and a bullish trend in domestic equities. However, escalating crude oil prices on the international front exerted pressure on the rupee, tempering its gains, according to forex traders.
In the interbank foreign exchange market, the rupee commenced trading at 82.90 and fluctuated between a high of 82.82 and a low of 82.91 vis-à-vis the greenback during intra-day transactions. Ultimately, the currency concluded the day at 82.83, marking an uptick of 7 paise from its previous closing value.
Tuesday witnessed the rupee maintaining stability, with the currency settling flat at 82.90 against the US dollar. Concurrently, the dollar index, which measures the dollar’s performance against a basket of six major currencies, experienced a decline of 0.19%, reaching 103.55. Analysts attributed this downward movement to the release of services PMI data in the US, revealing a growth rate in February that fell below market expectations.
Market sentiment remained cautious as investors awaited key economic indicators, including non-farm payroll data in the US and Federal Reserve Chairman Jerome Powell’s testimony before the US Congress regarding the central bank’s monetary policy decisions.
Amidst these developments, Brent crude futures, the global oil benchmark, edged up by 0.77% to reach USD 82.67 per barrel, adding pressure on the rupee due to India’s heavy reliance on oil imports.
On the domestic front, the equity market showcased robust performance, with the Sensex surging by 408.86 points, or 0.55%, to establish a new all-time high of 74,085.99. Similarly, the Nifty climbed 117.75 points, or 0.53%, reaching a record level of 22,474.05.
Foreign institutional investors (FIIs) continued to display confidence in the Indian capital markets, emerging as net buyers on Tuesday with share purchases amounting to Rs 574.28 crore, as per exchange data.
The rupee’s resilience amid global uncertainties underscores its stability amidst market fluctuations, providing a glimmer of optimism for investors and policymakers alike.