Rupee gains 6 paise to 85.51 against US dollar on FII inflows, soft crude prices

The Indian rupee strengthened by 6 paise to 85.51 against the US dollar on Wednesday, aided by foreign fund inflows and easing global crude prices. Traders expect range-bound movement amid demand from oil firms and government-related payments.

Mumbai: The Indian rupee rose 6 paise to 85.51 against the US dollar in early trade on Wednesday, aided by strong FII inflows and a decline in global crude oil prices.

The rupee could move within a range of 85.40-90 during the day, with the mid-month demand coming up for oil, defence, and government payments, forex traders said.

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At the interbank foreign exchange, the rupee opened at 85.53 against the greenback before inching up to 85.51, higher by 6 paise from its previous close. The domestic unit rose 9 paise to settle at 85.57 on Tuesday.

“The rupee was in a range-bound, lacklustre trading yesterday (Tuesday) as the market awaited a deal between China and the US. The rupee could move within a range of 85.40-90 during the day,” Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said.

In the domestic equity market, the 30-share BSE Sensex rose 93.43 points, or 0.11 per cent, to 82,485.15 on Wednesday morning, while the Nifty rose 19.40 points, or 0.08 per cent, to 25,123.65.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose by 0.05 per cent to 99.14 after falling on Tuesday night.

“The US futures dipped on Tuesday evening as a US court ruled that President Donald Trump’s trade tariffs can remain in place, dampening hopes that a legal challenge could block the duties. US and Chinese officials had earlier stated that consensus on a trade framework had been reached, but more details were yet to be provided,” Bhansali said.

Brent crude, the global oil benchmark, dipped 0.18 per cent to USD 66.75 per barrel in the futures trade.

Foreign institutional investors (FIIs) purchased equities worth Rs 2,301.87 crore on a net basis on Tuesday, according to exchange data.