The Indian rupee strengthened by 7 paise to close at 83.37 (provisional) against the US dollar today, buoyed by positive domestic market cues and a softer American currency. A decline in crude oil prices also lent support to the local unit.
Starting the day at 83.40 against the greenback at the interbank foreign exchange market, the rupee touched an intra-day high of 83.32 and a low of 83.45. Ultimately, it settled at 83.37, marking a 7 paise increase from its previous close. This follows a similar appreciation of 8 paise on Friday, where the rupee closed at 83.44 against the US dollar.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, commented, “We expect the rupee to trade with a slight positive bias amid easing geopolitical tensions in the Middle East, which has improved global risk sentiments. The retreat of the US Dollar and crude oil prices may also lend support to the rupee. However, any new aggressions in the Middle East could limit sharp upside movements.”
Choudhary also noted that investors may exercise caution ahead of the release of PMI and inflation data from the US this week. He predicted that the USDINR spot price could trade within a range of Rs 83.10 to Rs 83.60.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up by 0.02% to 106.17. Despite the contained tensions between Israel and Iran over the weekend, the US Dollar maintained its strength above the 106 mark, attributed to a hawkish stance by the US Federal Reserve.
In the commodities market, Brent crude futures, the global oil benchmark, declined by 0.69% to USD 86.69 per barrel. On the domestic front, the Sensex climbed 560.29 points, or 0.77%, to settle at 73,648.62 points, while the Nifty rose 189.40 points, or 0.86%, closing at 22,336.40 points.
Foreign institutional investors (FIIs) turned net buyers on Friday, purchasing shares worth Rs 129.39 crore, as per exchange data. On the other hand, India’s forex reserves decreased by USD 5.401 billion to USD 643.162 billion for the week ended April 12, as reported by the Reserve Bank. However, the overall reserves increased by USD 2.88 billion to a new high of USD 648.562 billion in the previous reporting week.