Rupee gains 2 paise against US dollar on weak greenback and strong equity cues

The rupee recovered early losses to trade at 89.20 against the US dollar on Wednesday, supported by foreign inflows and strong domestic equity sentiment. A slightly weaker dollar index helped, though rising crude prices continued to exert pressure on the currency.

Mumbai: The rupee pared initial losses and strengthened 2 paise to 89.20 against the US dollar in early trade on Wednesday tracking a weak greenback and firm domestic equity market sentiment.

According to forex traders, some inflow of foreign capital into domestic stock markets also supported the Indian currency even though rising crude oil prices kept it under pressure.

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At the interbank foreign exchange market, the rupee opened at 89.24, lost to 89.26 and then regained to trade at 89.20 against the greenback in initial deals, up 2 paise from its previous closing level.

The rupee settled 6 paise lower at 89.22 against the greenback on Tuesday.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was lower by 0.02 per cent at 99.56.

Brent crude, the global oil benchmark, rose 0.40 per cent to USD 62.70 per barrel in futures trade.

On the domestic equity market front, the Sensex climbed 171.19 points or 0.20 per cent to 84,758.20 in early trade while Nifty rose 73.20 points or 0.28 per cent to 25,958.00.

Foreign institutional investors purchased equities worth Rs 785.32 crore on a net basis on Tuesday, according to exchange data.