Mumbai, Jun 14 (PTI) The rupee gained 15 paise to settle at 82.10 against the US dollar on Wednesday, helped by robust macro fundamentals, FII inflows and a weak greenback against major rivals overseas.
At the interbank foreign exchange market, the local unit opened at 82.28 against the US dollar and settled at 82.10, up 15 paise over its previous close amid a positive trend in domestic equities.
During the day, the domestic unit witnessed an intra-day high of 82.08 and a low of 82.32.
On Tuesday, the rupee closed at 82.25 against the US currency.
“The Indian rupee rose to a one-month high on reports of corporate inflows and positive domestic equities,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.
Choudhary further added that the weak US dollar also supported the rupee while some recovery in crude oil prices capped sharp gains. The US dollar declined on rising expectations of a pause in rate hikes by the US Federal Reserve.
“We expect the rupee to trade with a positive bias on weakness in the dollar and expectations of a no rate hike by the US Federal Reserve.
“A rise in risk appetite in global markets may also support the rupee. However, a positive tone in crude oil prices may cap a sharp upside. We expect the USD/INR spot to trade between 81.60 to 82.50 in the near term,” Choudhary added.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.18 per cent to 103.15.
Meanwhile, global oil benchmark Brent crude futures advanced 1.09 per cent to USD 75.10 per barrel.
“The rupee has gained strength against the US Dollar as positive rallies in the capital market have supported the rupee buyers, pushing the price above 82.10, a level not seen since May 12, 2023. Additionally, the weakness of the US Dollar and a decline in crude oil prices over the past week have further bolstered sentiment for rupee buyers,” Jateen Trivedi, VP Research Analyst at LKP Securities, said.
On the domestic equity market front, the 30-share BSE Sensex advanced 85.35 points or 0.14 per cent to end at 63,228.51 points, and the broader NSE Nifty rose 39.75 points or 0.21 per cent to 18,755.90 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they purchased shares worth Rs 1,714.72 crore, according to exchange data.
On the domestic macroeconomic front, the wholesale price-based inflation rate fell to (-) 3.48 per cent in May on easing prices of food, fuel and manufactured items, strengthening the case for continuing with the pause in rate hikes in the coming months of the current fiscal.
“Looking ahead, traders are anticipating that the upcoming US policy announcement will not include any interest rate hikes. This expectation has led to increased optimism among traders, as it is believed that a lack of rate hikes would further boost the value of the Indian Rupee.
Consequently, the US Dollar is expected to face bearish momentum, which could contribute to the rupee’s continued gains against the dollar. The rupee can be seen going higher towards 81.50 if a rate pause is indicated with a dovish stance,” Trivedi said. PTI DRR BAL BAL
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