Forex traders noted that the domestic unit was dragged down by a volatile equity market and continued outflow of foreign funds.
Published Date – 29 February 2024, 12:10 PM
Mumbai: The rupee appreciated 2 paise to 82.89 against the US dollar in early trade on Thursday, tracking a weak American currency and a downward trend in the crude oil prices.
The domestic unit, however, weighed down by a volatile equity market and unabated outflow of foreign funds, forex traders said.
Market participants were also awaiting the domestic GDP data to be released later in the day, they said.
At the interbank foreign exchange, the local currency opened at 82.88 and dipped to 82.89 against the greenback, registering a gain of 2 paise from its previous close.
On Wednesday, the rupee settled 2 paise lower at 82.91 against the US dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was 0.11 per cent lower at 103.86 on Thursday.
Analysts said the dip in the American currency was an instant reaction to the US macroeconomic data which projected a slightly lower growth rate for the world’s largest economy.
According to Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial Services, market participants remained cautious ahead of the GDP number that will be released on the domestic front.
“Today, market participants will focus on India’s GDP which is expected at 6.6 per cent, and any disappointment could weigh on the rupee. Also focus will be on German CPI, and the Fed’s preferred inflation gauge- the Core PCE price index. We expect USD-INR (Spot) to trade sideways and quote in the range of 82.80-83.20,” he added.
Brent crude futures, the global oil benchmark, declined 0.18 per cent to USD 83.53 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 68.22 points or 0.09 per cent higher at 72,373.10 points.
The broader NSE Nifty rose 2.80 points or 0.01 per cent to 21,953.95 points.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth Rs 1,879.23 crore on a net basis, according to exchange data.
