Rupee jumps 9 paise to 83.37 against US dollar in early trade
According to forex traders, the Indian currency faced pressure due to the outflow of foreign funds and persistently high crude oil prices.
Mumbai: The rupee climbed 9 paise to 83.37 against the US dollar in early trade on Friday, tracking strong sentiment in the domestic equity markets and a weak American currency against major rivals overseas.
Forex traders said the outflow of foreign funds and elevated level of crude oil prices, however, weighed on the Indian currency.
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At the interbank foreign exchange, the domestic unit opened strong at 83.40 and touched the intra-day peak of 83.36 against the greenback.
The local unit later traded at 83.37 against the dollar in the morning deals, registering a gain of 9 paise from its previous closing level. The rupee had settled 3 paise lower at 83.46 against the dollar on Thursday.
According to Gaurang Somaiya, Forex and bullion analyst, Motilal Oswal Financial Services Ltd, the dollar was weighed down against major crosses after the US Federal Reserve kept the key interest rate unchanged for the sixth consecutive time.
Also, the ongoing pressures and a tight labour market indicated a stall in progress toward bringing inflation back to its 2 per cent target this year.
Analysts also said market participants are expected to keep a close watch on the US non-farm payroll data to be released on Friday. Besides, weekly unemployment claims, trade balance and factory order data from the US are likely to provide further cues.
“Today, the focus will be on the non-farm payrolls data, which is expected to come in marginally lower and that could weigh on the greenback. Apart from payrolls, services PMI number is also likely to trigger volatility for the dollar. We expect USD-INR (Spot) to trade sideways and quote in a range of 83.20-83.50,” Somaiya said.
India’s manufacturing PMI fell to 58.8 in April 2024 from 59.1 in the previous month, a monthly survey said on Thursday.
The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI), however, recorded the second fastest improvement in operating conditions in three-and-a-half years supported by buoyant demand.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.04 per cent to 105.13. Brent crude futures, the global oil benchmark, rose 0.36 per cent to USD 83.97 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 463.87 points or 0.62 per cent higher at 75,074.98. The broader NSE Nifty soared 136.65 points or 0.60 per cent to 22,784.85.
Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday, as they sold shares worth Rs 964.47 crore on a net basis, according to exchange data.
