The rupee opened strong at 83.13 against the US dollar and moved in the range of 83.03 to 83.13 against the greenback
Published Date – 04:07 PM, Fri – 29 September 23
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Mumbai: The rupee appreciated 14 paise to settle at 83.05 (provisional) against the US dollar on Friday, boosted by a firm trend in equity markets and a sharp correction in the greenback against major rivals overseas.
However, selling pressure from foreign equity investors and rising crude oil prices in international markets weighed on the domestic unit, forex traders said.
The rupee opened strong at 83.13 against the US dollar and moved in the range of 83.03 to 83.13 against the greenback. It finally settled at 83.05 (provisional), registering a gain of 14 paise from its previous close.
On Thursday, the rupee settled 3 paise higher at 83.19.
Analysts said the rupee also strengthened due to a significant decline in India‘s current account deficit (CAD). However, rising interest rates and US bond yields prompted foreign investors to stay in selling mode.
CAD almost halved to USD 9.2 billion, or 1.1 per cent, of GDP in the first quarter of the current fiscal from USD 17.9 billion (2.1 per cent of GDP) a year ago, the Reserve Bank of India said on Thursday.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said: “Indian rupee strengthened on Friday on weak US dollar index and a decline in crude oil prices. Positive tone in domestic markets also strengthened the rupee. However, FII outflows capped sharp gains”.
The dollar declined on concerns over looming US government shutdown fears. Disappointing economic data from the US also weighed on the greenback, he added.
“We expect the rupee to trade with a slight positive bias on as US government shutdown worries may keep the dollar pressure. Recovery in global markets may also support the local currency.
“However, expectations of recovery in crude oil prices and selling pressure from foreign investors may weigh on the rupee,” Choudhary said, adding “Traders may also take cues from India’s fiscal deficit data. USD/INR spot price is expected to trade in a range of Rs 82.70 to Rs 83.40”.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined by 0.52 per cent to 105.68.
Brent crude, the global oil benchmark, was trading 0.36 per cent higher at USD 95.72 per barrel.
On the domestic equity front, the 30-share BSE Sensex jumped 320.09 points or 0.49 per cent to settle at 65,828.41. The broader Nifty climbed 114.75 points or 0.59 per cent to end at 19,638.30.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth Rs 3,364.22 crore, according to exchange data.
