Early on Wednesday, the rupee gained 5 paise to 83.11 against the US dollar, tracking a decline in the US dollar and a drop in the price of crude oil on the international market.
Forex traders reported that despite pressure from a muted sentiment in the domestic equity markets, some buying by foreign equity investors supported the Indian currency(Rupee).
The Rupee gained 5 paise from its previous close to open stronger by 8 paise at 83.08 on the interbank foreign exchange market. It then touched its lowest level of 83.11 against the US dollar.
The rupee ended the day 4 paise weaker against the US dollar, at 83.16. Due to Dussehra, forex markets were closed on Tuesday.
US yields pulled back from a record high, according to Gaurang Somaiya, a Forex and bullion analyst at Motilal Oswal Financial Services. As a result, the dollar declined against its major crosses.
According to him, it is anticipated that the USD-INR (Spot) will “trade sideways with a negative bias and quote in the range of 82.80 and 83.20.”
The US GDP report, which is anticipated tomorrow, will now be closely watched by market players as it has the potential to cause further erratic fluctuations in bond yields and currency markets. After initial manufacturing data came in below expectations, the euro and pound dropped during yesterday’s trading session, Somaiya continued.
The dollar index, which measures the strength of the US dollar relative to a basket of six other currencies, was down 0.09 percent at 106.18 in the meantime.
Benchmark Brent crude for global oil prices increased by 0.05 percent to USD 88.11 per barrel.
Regarding the domestic equity market, the Nifty was down 11.20 points, or 0.06 percent, at 19,270.55 points, while the Sensex fell 48.16 points, or 0.06 percent, to 64,530.02 points.
Exchange data shows that foreign institutional investors purchased stocks on Monday for a total of Rs 252.25 crore.
