Mumbai, Sep 25 The rupee appreciated 24 paise to close at 95.75 against the US dollar on Friday, holding above the 96-mark, on improved global risk sentiment and possible intervention by the Reserve Bank.
Forex traders said gains in the rupee were capped by US dollar demand from local importers, high crude prices and a stronger greenback driven by hawkish Federal Reserve signals.
At the interbank foreign exchange market, the rupee opened at 95.92 against the American currency. During the day, the local unit slipped to an intra-day low of 95.94, but recovered lost ground to close at 95.75, a 24 paise rise from its previous close.
On Thursday, the rupee weakened by 26 paise to settle at 95.99 against the US dollar.
“We expect the rupee to trade with a slight positive bias on improved global risk sentiment amid optimism over the proposed US-Iran phased deal to reopen the Strait of Hormuz and the end of the US blockade.
“Falling crude oil prices and a weak dollar may support the rupee at lower levels. However, any fresh escalations may pressure the rupee at higher levels. Traders may take cues from durable goods orders data from the US,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.
According to Choudhary, the USD/INR spot price is expected to trade in a range of 95.60 to 96.10.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.18 per cent lower at 101.10.
Brent crude futures, the global oil benchmark, were trading lower by 1.08 per cent at USD 105.45 per barrel.
“Brent has eased somewhat from the recent highs, but remains elevated amid continuing Middle East supply concerns. The fact that USD/INR is holding around 95.80-95.90 despite firm dollar and high crude prices suggests that dollar demand is being met around these levels,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
The RBI is expected to step in as the rupee weakens toward 96, traders said, adding that India’s economic adjustment remains controlled, backed by foreign exchange reserves close to USD 781 billion and strategic policies that have cushioned the domestic economy from global energy price shocks.
On the domestic equity market front, Sensex rose 315.20 points to settle at 73,895.74, and Nifty settled 77.40 points higher at 23,140.50.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,693.93 crore on a net basis on Friday, according to exchange data.
India’s forex reserves dropped USD 14.881 billion to USD 765.901 billion during the week ended September 18 due to a fall in foreign currency assets, according to the RBI data released on Friday.
(PTI News)
