Rupee finds lift as dollar weakens
The rupee appreciated 3 paise to close at 95.42 (provisional) against the US dollar on Friday, due to weakness in the greenback against major rivals overseas.
According to forex traders, the rupee stayed under pressure due to foreign fund outflows and rising crude oil prices amid geopolitical uncertainties.
At the interbank foreign exchange market, the rupee opened at 95.39 and moved in a tight range of 95.38 to 95.44 against the American currency before ending the session at 95.42 (provisional), up 3 paise from its previous close.
On Thursday, the rupee closed 12 paise lower at 95.45 against the US dollar.
Jateen Trivedi, VP Research Analyst — Commodity and Currency, LKP Securities, said the rupee traded with a weak bias this week, although the overall movement remained largely range-bound.
“Crude had surged around 25 per cent during July and continues to remain elevated, keeping the import-cost pressure on the rupee. Meanwhile, the dollar index remained below the 100-mark near 99.50, limiting the rupee’s downside. Technically, the rupee is expected to remain in the 95.10-95.80 range in the near term, with crude and the dollar remaining key directional triggers,” Trivedi said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.08 per cent lower at 99.78.
Brent crude, the global oil benchmark, was trading higher by 0.99 per cent at USD 87.93 per barrel in futures trade.
Analysts said the dollar index retreated after a fall in US Treasury yields, and the data showed inflation in the world’s largest economy at lower levels.
Also, they said that oil prices bounced back after days of easing, as hopes of a deal to end the West Asia crisis remained uncertain, with both the US and Iran contradicting each other over ship transit conditions through the Strait of Hormuz.
On the domestic equity market front, Sensex fell 70.71 points, or 0.09 per cent, to settle at 78,009.25, and Nifty dropped 29.25 points, or 0.12 per cent, to 24,366.
Foreign institutional investors offloaded equities worth `510.69 crore on a net basis on Thursday, according to exchange data.
