Rupee rises 6 paise against US dollar

Rupee rises 6 paise against US dollar

The rupee appreciated 6 paise to settle at 82.85 against the US dollar on Wednesday, supported by a weak American currency against major rivals overseas.However, foreign capital outflows and surging crude prices in the international markets capped the positive bias in the rupee, forex analysts said.Investors were trading cautiously ahead of the US inflation data and RBI’s monetary policy decision to be released on Thursday.

The Reserve Bank’s rate-setting panel MPC started its three-day review meeting on Tuesday. At the interbank foreign exchange, the domestic unit opened stronger at 82.83 and finally settled at 82.85 against the dollar, registering a gain of 6 paise over its previous close.

“This led to a safe-haven appeal for the US dollar. China’s CPI declined to 0.3 per cent, posting its first year-on-year decline since February 2021.” Choudhary said the rupee is expected to trade with a negative bias on risk aversion in global markets and selling pressure from FIIs. “However, some softness in the US dollar may support the rupee at lower levels.” “Traders may trim their positions ahead of RBI’s monetary policy decision tomorrow. Markets expect RBI to maintain the status quo and keep the repo rate unchanged at 6.5 per cent. We expect the USD/INR spot to trade in the range of 82.40 to 83.30 in the near term,” he added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.11 per cent to 102.42.Global oil benchmark Brent crude surged 0.75 per cent to USD 86.82 per barrel.

On the domestic equity market front, the 30-share BSE Sensex closed 149.31 points or 0.23 per cent higher at 65,995.81. The broader NSE Nifty advanced 61.70 points or 0.32 per cent to close at 19,632.55. Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they bought shares worth Rs 644.11 crore, according to exchange data.

According to Jateen Trivedi, VP Research Analyst at LKP Securities, “Dollar index saw minor profit booking from 102.55 to 102.15 which had given the rupee a positive opening but probability of US bank rating downgrade gave dollar strength”. “RBI policy tomorrow shall provide a trend in the rupee movement if any statement or status quo comes out of the expectation. With the recent agri commodities price rise and crude rise, RBI policy will be keenly watched by rupee participants. Rupee range can be seen between 82.60-83.10 before the policy,” Trivedi said.