Mumbai, May 4 (PTI) The rupee edged up by 2 paise to settle at 81.78 against the US dollar in a range-bound trade on Thursday, tracking the weakness of the American currency in the overseas market.
Forex traders said significant foreign fund inflows and crude oil prices trading below USD 75 a barrel also supported the local unit.
At the interbank foreign exchange market, the local unit opened higher at 81.68 against the US currency but later pared some of the gains to close at 81.78, registering a gain of 2 paise over its previous close.
During the session, the rupee touched a high of 81.65 and a low of 81.84 against the dollar. On Wednesday, the rupee closed at 81.80 against the US currency.
The rupee erased opening gains following bargain buying ahead of a long weekend. The recovery in crude oil prices and weaker Asian currencies dragged the rupee lower but it still hovers near a three-month high, said Dilip Parmar, Research Analyst at HDFC Securities.
The Federal Reserve’s dovish signal and concern over the US banking sector are discouraging the dollar bulls.
Traders will eye on the ECB rate outcome with the market pricing a quarter-point deposit-rate hike to 3.25 per cent, Parmar added.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.04 per cent to 101.30. The US dollar retreated after the Federal Reserve hinted at a pause to its year-long rate hike cycle following its latest 25 basis point hike in interest rates.
Global oil benchmark Brent crude futures rose 0.98 per cent to USD 73.04 per barrel.
The rupee opened the day strong against the dollar but gave up its gains as it fell towards 81.80 through the day, said Jateen Trivedi, VP Research Analyst at LKP Securities.
The dollar index was seen trading between 101.04-101.40, and foreign institutional investors (FII) were net buyers.
“Rupee range can be seen between 81.50-82.00 after Fed’s desk hinted towards a dovish stance which can help the rupee going ahead,” Trivedi said, adding that softening crude prices can also set a positive tone for the rupee.
On the domestic equity market front, the 30-share BSE Sensex advanced 555.95 points or 0.91 per cent to end at 61,749.25 points, and the broader NSE Nifty rose 165.95 points or 0.92 per cent to 18,255.80 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Thursday as they purchased shares worth Rs 1,414.73 crore, according to exchange data. PTI DRR MR MR
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