Mumbai: Rupee Continues Upward Trend, Appreciates 6 Paise to 83.37 Against USD
The Indian rupee extended its gains for the second consecutive session, appreciating by 6 paise to 83.37 against the US dollar in early trade on Wednesday, bolstered by sustained foreign capital inflows and firm equity markets.
However, the local currency encountered resistance due to a stronger US dollar and rising crude oil prices, according to forex traders.
In the interbank foreign exchange market, the rupee opened strong at 83.39 and further appreciated to 83.34 against the greenback in initial trades. It later stabilized at 83.37, marking a 6 paise increase from its previous close.
On Tuesday, the rupee had closed 12 paise higher at 83.43 against the US dollar.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was marginally higher by 0.02 percent at 104.90.
Analysts noted that the dollar index initially declined following weaker-than-expected US retail sales data but recovered with stronger-than-forecast May industrial output figures.
US Federal Reserve officials indicated a continued hawkish stance, dampening expectations for an interest rate cut until December.
“The dollar eased against the euro on Tuesday after US retail sales data showed slower growth, suggesting potential Federal Reserve rate cuts later this year,” said Anand James, Chief Market Strategist at Geojit Financial Services.
Brent crude futures, the global oil benchmark, rose by 0.02 percent to USD 85.35 per barrel.
In the domestic equity markets, the 30-share BSE Sensex increased by 199.63 points, or 0.26 percent, to 77,500.77 points. The broader NSE Nifty climbed by 25.55 points, or 0.11 percent, to 23,583.45 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, purchasing shares worth Rs 2,569.40 crore, according to exchange data.
Analysts attributed the robust FII buying to a strong domestic macroeconomic outlook and a sharp decline in US treasury yields.
Government data showed that net direct tax collections grew by 21 percent to over Rs 4.62 lakh crore so far this fiscal year, driven by higher advance tax payments by corporations, reflecting robust economic activity.
Fitch Ratings on Tuesday raised India’s growth forecast for the current fiscal year to 7.2 percent from the 7 percent projected in March, citing a recovery in consumer spending and increased investment.
