According to forex traders, the strength of the US currency in the global market and foreign fund outflows restrained the local unit from rising
Published Date – 27 June 2024, 01:40 PM
Mumbai: The rupee appreciated 8 paise to 83.49 against the US dollar in early trade on Thursday, as crude oil prices retreated from their elevated levels.
Forex traders said the strength of the American currency in the overseas market and foreign fund outflows weighed on the local unit and restricted the upmove.
At the interbank foreign exchange market, the local unit opened at 83.56 and gained further ground to trade at 83.49 against the greenback in initial deals, registering an increase of 8 paise from its previous closing level.
On Wednesday, the rupee depreciated 14 paise against the US dollar and settled at 83.57.
“Stronger fundamentals such as stable inflation, accelerated economic growth, higher business activity, and a controlled Current Account Deficit offer a counterbalance supporting the rupee. Additionally, continuous RBI intervention has also helped prevent significant rupee depreciation,” CR Forex Advisors MD Amit Pabari said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally lower by 0.10 per cent at 105.94.
Brent crude futures, the global oil benchmark, were trading 0.20 per cent lower at USD 85.08 per barrel.
Brent oil prices slid after US inventory build-up fuelled fears about a slow demand from the US. Worries about a potential expansion of Gaza Hostilities disrupting Middle East supplies capped the decline, said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
In the domestic equity market, the 30-share BSE Sensex declined 38.81 points, or 0.05 per cent, to 78,635.44 points. The broader NSE Nifty fell 15.20 points, or 0.06 per cent, to 23,853.60 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 3,535.43 crore, according to exchange data.
