Mumbai, Mar 6 (PTI) The rupee appreciated 7 paise to settle at 82.83 against the US dollar on Wednesday, buoyed by a weak American currency against major rivals overseas and a rally in domestic equities.
However, surging crude oil prices in international markets put pressure on the local currency and restricted the rise, forex traders said.
At the interbank foreign exchange market, the local unit opened at 82.90 and oscillated between the peak of 82.82 and the lowest level of 82.91 against the greenback during intra-day deals. The currency finally settled at 82.83, registering a gain of 7 paise from its previous close.
On Tuesday, the rupee settled flat at 82.90 against the US dollar.
“The rupee strengthened supported by a buildup in the banking sector, particularly in private banks, which contributed to a positive trend in the capital market index.
“Additionally, weakness in the dollar index, which failed to surpass the 104 mark after late-night buying yesterday, further aided the rupee’s ascent…,” According to Jateen Trivedi, VP Research Analyst, LKP Securities.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined by 0.19 per cent to 103.55.
Analysts attributed the downward movement in the dollar index to the services PMI (Purchasing Managers’ Index) data in the US, which showed the sector’s growth in February fell short of expectations.
Market participants were also awaiting cues from non-farm payroll data in the US and Federal Reserve Chairman Jerome Powell’s testimony at the US Congress about the central bank’s monetary policy moves.
Brent crude futures, the global oil benchmark, climbed 0.77 per cent to USD 82.67 per barrel.
On the domestic equity market front, Sensex surged 408.86 points, or 0.55 per cent, to settle at its new lifetime peak of 74,085.99. The Nifty soared 117.75 points, or 0.53 per cent, to close at the highest level of 22,474.05.
Foreign institutional investors (FIIs) were net buyers in the capital markets on Wednesday as they bought shares worth Rs 2,766.75 crore, according to exchange data.
“We expect the rupee to trade with a slight negative bias on risk aversion in global markets and concerns over selling pressure from FIIs. Elevated crude oil prices may also weigh on the rupee. However, the softness of the US dollar may support the rupee at lower levels,” Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas, said. PTI HVA BAL BAL
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