The Indian currency continued its upward trend for the third consecutive day, rising by 4 paise to 83.14 against the US dollar in early trade on Thursday. The rupee was supported by easing crude oil prices and a weak American currency.
The rupee opens at 83.17, and trades in a narrow range
At the interbank foreign exchange, the rupee opened at 83.17 and then traded between the range of 83.13 to 83.17 against the greenback. It later traded at 83.24 against the dollar, registering a gain of 4 paise from its previous close.
On Wednesday, the rupee settled 7 paise higher at 83.18 against the US dollar. On Tuesday, the domestic unit had gained 3 paise against the American currency.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02 percent lower at 106.07.
Crude oil prices ease, support rupee
The rupee was also helped by easing crude oil prices, which have been on a downward trend since Monday. Brent crude futures, the global oil benchmark, fell 0.35 per cent to USD 87.84 per barrel.
Crude oil prices have been under pressure due to concerns over demand recovery amid rising Covid-19 cases in some parts of the world and a potential supply increase from Iran if it reaches a nuclear deal with world powers.
Lower crude oil prices are beneficial for India, which imports about 80 per cent of its oil needs.
Equity markets subdued, FIIs net sellers
The rupee’s gains were capped by subdued sentiments in the domestic equity markets and concerns over foreign funds withdrawal.
The 30-share BSE Sensex fell 6.22 points or 0.01 per cent to close at 66,466.83 points while the broader NSE Nifty slipped 1.95 points or 0.01 per cent to end at 19,811.35 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 997.76 crore, according to exchange data.
Market participants are expected to remain watchful of the industrial production data for August to be released by the government on Thursday.
Rupee outlook
According to Gaurang Somaiya, forex and bullion analyst at Motilal Oswal Financial services, “we expect the USD-INR (Spot) to trade sideways and quote in the range of 83.05 and 83.40”.
He added that “the focus will now shift to inflation number that will be released from the US and better-than-expected number could extend gains for the greenback”.
The attack on Israel by Hamas has raised fears of a broader conflict in the Middle East, which could also weigh on the rupee sentiment.
