Rupee rises 6 paise in early trade as crude oil eases and dollar weakens

The rupee appreciated 6 paise to 93.27 against the US dollar in early trade on Thursday, supported by easing crude oil prices and a weaker dollar, though foreign fund outflows and importer demand capped sharper gains.

Mumbai: The rupee appreciated by 6 paise to 93.27 against the US dollar in early trade on Thursday, driven by retreating crude oil prices and a weakening American currency, amid hopes of a truce in West Asia.

According to forex analysts, crude oil prices hovering below the USD 95-a-barrel level sent positive cues to investors in domestic equities, even though the outflow of foreign capital and demands for dollars from importers resisted a sharp recovery in the rupee.

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At the interbank foreign exchange market, the rupee opened at 93.29 and gained further, trading at 93.27 against the greenback in early deals, up 6 paise from its previous closing level.

On Wednesday, the rupee gained 2 paise to settle at 93.33 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was lower by 0.12 per cent at 97.72.

Brent crude, the global oil benchmark, was trading marginally up by 0.02 per cent at USD 94.95 per barrel in futures trade.

On the domestic equity market front, the 30-share Sensex gained 529.55 points or 0.68 per cent to 78,640.79 in early trade, while the Nifty rose 156.50 points or 0.65 per cent to 24,387.80.

Foreign Institutional Investors were net sellers on Wednesday and offloaded equities worth Rs 666.15 crore, according to exchange data.

Government data released on Wednesday showed that the Wholesale Price Index (WPI)-based inflation rose sharply to an over 3-year high of 3.88 per cent in March, driven by a sharp spike in rates of fuel, power and manufactured items amid the West Asia crisis.

Consumer price index-based retail inflation rose 3.4 per cent in March compared to 3.21 per cent in the preceding month, mainly due to an uptick in certain food items, data released earlier this week showed.