Rupee rises 15 paise against US dollar in early trade

The rupee appreciated 15 paise to 95.32 against the US dollar in early trade as the dollar weakened and crude oil prices eased. Gains in domestic equities supported the currency despite foreign fund outflows and continuing tensions in West Asia

Mumbai: The rupee rose 15 paise to 95.32 against the US dollar in early trade on Friday as the greenback weakened and oil prices eased despite intensifying tensions in West Asia.

FII outflows and uncertainty over fresh tensions in West Asia weighed on the local unit, while a strong start to the day’s trading in the domestic equity markets provided support, according to forex traders.

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The US launched new airstrikes against Iran early on Thursday, and Tehran responded by targeting US-allied West Asian countries in an exchange of fire that threatened an interim deal intended to help end the war.

Back-and-forth attacks, including those a day earlier, have repeatedly threatened the ceasefire. However, Thursday’s exchange appeared to be larger in scale, with sirens sounding at least three times in Bahrain, home to the US Navy’s Fifth Fleet headquarters, and missiles targeting Kuwait and Qatar.

At the interbank foreign exchange market, the rupee opened at 95.27 against the greenback before easing to 95.32, up 15 paise from its previous close.

The rupee had appreciated by 1 paisa to settle at 95.47 against the US dollar on Thursday.

“Traders reported dollar selling by state-run banks, widely viewed as acting on behalf of the Reserve Bank of India (RBI). The intervention helped the rupee break through the 95.50 level and maintain gains through Thursday’s session. Exporters may sell dollars on all upticks while importers keep buying the dips on Friday,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.64, down 0.25 per cent.

Brent crude, the global oil benchmark, was trading 0.35 per cent lower at USD 77.75 per barrel in futures trade.

On the domestic equity market front, the Sensex jumped 694.83 points to 77,423.82 in early trade on Friday, while the Nifty surged 195.95 points to 24,154.85.

Foreign institutional investors offloaded equities worth Rs 532.86 crore on a net basis on Thursday, according to exchange data.