Updated December 28th, 2023 at 21:17 IST
Rupee rebounds 14 paise to 83.20 against US dollar
Forex traders say strengthening of rupee is due to influx of foreign funds, downtrend in crude oil prices.
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The rupee showed resilience after a consecutive two-day decline, closing 14 paise higher at 83.20 against the US dollar on Thursday. This upward movement was primarily fueled by a weakening American currency on the global front and a robust surge in the domestic stock market.
Interbank trading overview
Within the interbank foreign exchange, the rupee initiated trading at 83.33 and oscillated between 83.16 and 83.34 against the dollar. Ultimately, it settled at 83.20, marking a gain of 14 paise compared to its previous closure. Over the last two sessions, the rupee experienced a net loss of 18 paise.
Anuj Choudhary, a research analyst at Sharekhan by BNP Paribas, highlighted that the rupee's appreciation was driven by the weakening US dollar and a surge in the domestic markets. He expressed expectations for the rupee to maintain a slightly positive trajectory, buoyed by fresh foreign inflows and ongoing weakness in the US dollar. Choudhary also noted the significance of monitoring the US weekly unemployment claims data for potential market cues.
Dollar's fall and markets
The US dollar's decline stemmed from growing anticipations of interest rate reductions by the US Federal Reserve. The dollar index, measuring the dollar's strength against six major currencies, recorded a 0.28 per cent decrease, trading at 100.37 on Thursday.
Simultaneously, the global benchmark for oil prices, Brent crude, saw a 0.64 percent decline, settling at $79.14 per barrel.
In the domestic stock arena, the 30-share BSE Sensex surged by 371.95 points, or 0.52 per cent, to a record high of 72,410.38 points. Correspondingly, the broader NSE Nifty witnessed a climb of 123.95 points, or 0.57 per cent, reaching 21,778.70 points.
Furthermore, according to exchange data, foreign institutional investors (FIIs) injected Rs 4,358.99 crore into equities on Thursday, contributing to the stability of the rupee. Jateen Trivedi, VP Research Analyst at LKP Securities, predicted a trading range for the rupee between 83.15 and 83.45, attributing the currency's stability to the RBI's interventions and FII participation in financial markets.
(With Reuters inputs)
Published December 28th, 2023 at 21:16 IST