Rupee rises 2 paise to settle at 83.32 against U.S. dollar

The rupee sustained its gaining momentum for the second straight session and settled 2 paise higher at 83.32 (provisional) against the U.S. dollar on Wednesday boosted by robust buying in equity markets and inflow of foreign funds.

A weak American currency against major rivals supported the domestic unit while an upward movement in crude oil prices ahead of the crucial meeting of oil-producing countries capped the gain in the rupee, forex traders said.

At the interbank foreign exchange, the rupee opened stronger at 83.30 against the dollar and traded between the peak of 83.28 and the lowest level of 83.33 intra-day. It finally settled at 83.32 (provisional) against the greenback, up 2 paise over its previous close.

On Tuesday, the rupee rebounded from record low levels and settled 6 paise higher at 83.34 against the U.S. dollar.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said Indian rupee appreciated on positive domestic markets and foreign institutional investors inflows over the past three consecutive sessions.

“Domestic markets surged ~1%. However, a slight recovery in the U.S. dollar index and crude oil prices capped sharp gains. U.S. dollar declined for the fourth successive session on Tuesday on dovish comments from U.S. Federal Reserve officials. Economic data from the U.S., however, remained mixed,” he said.

Choudhary said the rupee is expected to trade with a slight negative bias on dollar demand from importers towards end of the month. “Traders may take cues from GDP data from the U.S. Investors may also take cues from India’s GDP and fiscal deficit data towards the end of the month. USD-INR spot price is expected to trade in a range of ₹83 to ₹83.60.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.13% at 102.88.

Global oil benchmark Brent crude futures surged 1.11% to $82.59 per barrel.

On the domestic equity market front, Sensex jumped 727.71 points, or 1.10%, to settle at 66,901.91 points. The Nifty climbed 206.90 points, or 1.04%, to 20,096.60 points.

Foreign institutional investors were net buyers in the capital market on Tuesday as they purchased shares worth ₹783.82 crore, according to exchange data.

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