Rupee rises 13 paise to 95.81 against US dollar as crude prices retreat

The rupee gained 13 paise to close at 95.81 against the US dollar on Wednesday, helped by an overnight decline in the dollar index, easing US Treasury yields and retreating crude prices, while weak domestic markets capped gains

Mumbai: The rupee appreciated 13 paise to close at 95.81 (provisional) against the US dollar on Wednesday, tracking an overnight decline in the US dollar index and as crude oil prices retreated from their elevated levels.

Forex traders said easing US Treasury yields from multi-decade highs also supported the rupee. However, weak domestic markets capped sharp gains for the Indian currency.

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At the interbank foreign exchange market, the rupee opened at 95.87, then lost ground to touch an intraday low of 95.98 against the American currency. At the end of Wednesday’s trading session, the domestic unit was quoted at 95.81 (provisional) against the greenback, higher by 13 paise over its previous close.

On Tuesday, the rupee settled marginally higher at 95.94, just a tad above the psychologically crucial 96-per-dollar level.

“We expect the rupee to trade with a negative bias on uncertainty over the US-Iran deal and risk aversion in global markets. Concerns over a strong dollar and elevated US Treasury yields may also pressurise the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

“Hopes that US and Iranian officials will talk through mediators may support the rupee at lower levels. Traders may take cues from ADP non-farm employment, the core PCE price index and final GDP data from the US,” Choudhary noted.

Meanwhile, the dollar index, which gauges the strength of the greenback against a basket of six currencies, was trading at 101.23, lower by 0.14 per cent.

Brent crude, the global oil benchmark, was trading 0.58 per cent higher at USD 103.18 per barrel in futures trade — its lowest level in over 10 days.

According to traders, the rupee is trading in a narrow range as dollar sales by state-run banks on behalf of the Reserve Bank of India in both spot and forward markets are keeping the USD/INR pair below the 96.00 level.

Additionally, foreign portfolio outflows of around USD 2.2 billion this month and firm US yields are keeping pressure on the USD/INR pair.

On the domestic equity market front, the Sensex dipped 48.78 points to settle at 72,480.29, while the Nifty was down 95.75 points at 22,620.45.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 9,980.22 crore on a net basis on Tuesday, according to exchange data.