Rupee rises 9 paise to 88.51 against US dollar amid lower crude prices and trade deal optimism

The rupee gained 9 paise to 88.51 against the US dollar, aided by lower crude prices. Investor sentiment remained cautious amid volatile global equities, FII outflows, domestic PMI data, and developments in the proposed India-US trade agreement.

Mumbai: The rupee gained 9 paise to 88.51 against the US dollar in early trade on Wednesday, supported by lower crude oil prices even as volatile equity markets across the globe weighed on investor sentiment.

The rupee also faced pressure due to a strong American currency as well as withdrawal of foreign capital from domestic stock markets, forex traders said.

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At the same time, investors were concerned about the progress on the proposed India-US trade deal and the domestic PMI data to be released later this week.

At the interbank foreign exchange market, the rupee opened at 88.57 and gained further to trade at 88.51 against the greenback in initial deals, up 9 paise from its previous closing level.

On Tuesday, the rupee settled 1 paisa lower at 88.60 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04 per cent higher at 99.49.

Brent crude, the global oil benchmark, declined 0.34 per cent to USD 64.67 per barrel in futures trade.

On the domestic equity market front, Sensex declined 46.27 points, or 0.05 per cent, to 84,626.75 in early trade, while the Nifty slipped 8.35 points, or 0.03 per cent, to 25,901.70.

Foreign institutional investors sold equities worth Rs 728.82 crore on Tuesday, according to exchange data.

Commerce and Industry Minister Piyush Goyal on Tuesday said “you will hear a good news” on the proposed trade pact between India and the US once the deal is fair, equitable and balanced.

The remarks came days after US President Donald Trump stated that the US is “pretty close” to reaching a “fair trade deal” with India, and added that he will lower tariffs imposed on Indian goods at “some point”.