Rupee rises 26 paise to 94.90 against US dollar in early trade

The rupee strengthened by 26 paise to 94.90 against the US dollar in early trade on Thursday, aided by lower crude oil prices, stable global risk sentiment and renewed foreign inflows into Indian bond markets despite continued caution over RBI intervention.

Mumbai: The rupee appreciated 26 paise to 94.90 against US dollar in early trade on Thursday, supported by easing crude oil prices.

Forex traders said the rupee opened on a positive note as crude oil prices have fallen back to levels seen before the West Asia conflict. Even global risk sentiment has stabilised compared to the panic witnessed a few weeks ago.

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Foreign investors poured nearly USD 5.3 billion into Indian bond markets during June, marking the first month of positive inflows after three consecutive months of outflows, they said.

At the interbank foreign exchange market, the rupee opened at 94.95, then touched 94.90 against the US dollar, registering a gain of 26 paise from its previous close.

On Wednesday, the rupee depreciated 60 paise to close at 95.16 against the US dollar.

“… As fresh foreign capital starts entering India, markets believe the RBI may continue absorbing a significant portion of these inflows rather than allowing them to fully strengthen the rupee,” CR Forex Advisors MD Amit Pabari said.

Pabari further said that despite positive FII inflows and lower crude oil prices the rupee weakened sharply. If the rupee cannot strengthen on good news, any negative development could easily push USDINR towards the 95.80–96.00 zone. “For now, the bias remains on the upside, while 94.80 is likely to act as an important support level,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.38, lower by 0.01 per cent.

Meanwhile, Brent crude, the global oil benchmark, was trading lower by 1.13 per cent at USD 70.76 per barrel in futures trade.

On the domestic equity market front, Sensex climbed 377.40 points to 77,269.54 early trade, while the Nifty rallied 106.70 points to 24,113.25.

Foreign institutional investors sold equities worth Rs 1,140.50 crore on a net basis on Wednesday, according to exchange data.