Rupee edges up 5 paise to 88.10 against US dollar on FII inflows, weak greenback

The rupee rose 5 paise to 88.10 against the US dollar in early trade Wednesday, supported by FII inflows and a weaker greenback. However, gains were capped by higher crude oil prices amid geopolitical tensions in West Asia.

Mumbai: The rupee rose 5 paise to 88.10 against the US dollar in early trade on Wednesday, aided by FII inflows and a weaker greenback against foreign currencies.

However, a moderate rise in global crude oil prices prevented sharper gains in the local unit, forex traders said.

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At the interbank foreign exchange, the rupee opened at 88.11 against the US dollar before inching up to 88.10, higher by 5 paise from its previous close.

The rupee had pared initial gains and dropped 6 paise to revisit its record low of 88.15 against the US dollar on Tuesday. On Friday, the rupee touched the lowest-ever intraday level of 88.38 but pared losses to settle 3 paise higher at Rs 88.09 against the US dollar.

“FPIs had bought equities yesterday (Tuesday)… and there was a tweet from US President Donald Trump that India and the US are continuing negotiations to address the trade barriers between the two nations and that he is looking forward to speaking with Prime Minister Narendra Modi,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.45 per cent to 97.90.

Brent crude, the global oil benchmark, was trading 0.86 per cent higher at USD 66.96 per barrel in futures trade.

“Brent oil prices rose… making a gain of 0.86 per cent as Israel attacked Hamas leadership in Qatar, raising concerns about potential supply disruptions in the region,” Bhansali said.

On the domestic equity market front, the Sensex was up 363.39 points, or 0.45 per cent, to 81,464.71, while the Nifty rose 117.60 points, or 0.47 per cent, to 24,986.20 points.

Foreign Institutional Investors bought equities worth Rs 2,050.46 crore on Tuesday, according to exchange data.