Rupee rises 14 paise against US dollar in early trade

The rupee appreciated 14 paise to 96.28 against the US dollar in early trade, supported by gains in domestic equities. However, higher crude oil prices, geopolitical tensions in West Asia and continued FII outflows limited the local currency's advance

Mumbai: The rupee gained 14 paise to 96.28 against the US dollar in early trade on Friday, buoyed by positive sentiment in the domestic equity markets.

However, heavy FII outflows and higher global crude oil prices amid heightened tensions in West Asia prevented further gains in the local unit, forex traders said.

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At the interbank foreign exchange, the rupee opened at 96.35 against the greenback before rising further to 96.28, up 14 paise from its previous close.

The rupee depreciated for the fourth straight day on Thursday, shedding 17 paise to settle at 96.42 against the US dollar.

The US expanded its airstrike campaign against Iran early on Friday by increasingly targeting bridges, as part of President Donald Trump’s threats to strike infrastructure to pressure Tehran to ease its chokehold on the Strait of Hormuz. Iran launched fresh missile attacks against US-allied nations in West Asia and warned that its attacks would escalate.

“Continued geopolitical uncertainties in West Asia sustained demand for safe-haven assets and kept investors cautious towards emerging market currencies, including the rupee. The rupee is expected to remain in the 96.00-96.50 range for the day with a downside bias, as the dollar index remains firm and oil prices remain near USD 85 per barrel,” 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 trading marginally higher by 0.02 per cent at 100.78.

Brent crude, the global oil benchmark, was trading 0.39 per cent higher at USD 84.83 per barrel in futures trade.

On the domestic equity market front, the Sensex jumped 480.95 points to 77,656.56 in early trade on Friday, while the Nifty was up 125.05 points at 24,201.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,205.56 crore on a net basis on Thursday, according to exchange data.