Mumbai, Nov 11 The rupee gained 6 paise to close at 93.71 against the US dollar on Wednesday, driven by domestic market strength and foreign capital inflows, alongside potential support from declining global crude oil prices.
Forex traders said the Indian rupee gained as domestic markets rose to an eight-month high amid FPI inflows and easing crude oil prices. However, a strong dollar and a surge in US Treasury yields capped sharp gains.
The dollar strengthened on hotter-than-expected CPI inflation in the US, raising odds of a rate hike by the Fed in December.
At the interbank foreign exchange market, the rupee opened at 93.71 against the US dollar. During intra-day trade, the rupee witnessed a high of 93.63 and a low of 93.88 against the American currency. The local unit settled at 93.71, higher by 6 paise from its previous close.
On Tuesday, domestic equity, currency and debt markets were closed on account of ‘Diwali Balipratipada’. On Monday, the rupee appreciated 21 paise to 93.77 against the US dollar.
“We expect the rupee to trade with a positive bias on strength in domestic markets and foreign inflows. Falling global crude oil prices may also support the rupee.
However, strength in the greenback and surge in US Treasury yields amid better-than-expected inflation and jobs data may cap sharp upside in the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.
US banks will remain closed on Wednesday for the Veterans Day holiday. USDINR spot price is expected to trade in a range of 93.40 to 93.95, Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 102.50, higher by 0.27 per cent.
Brent crude, the global oil benchmark, was trading 1.01 per cent higher at USD 92.41 per barrel in futures trade.
Foreign institutional investors (FIIs) purchased equities worth Rs 12,563.33 crore on Wednesday, according to exchange data.
“There was good supply of dollars from FIIs as stock markets also rallied. Despite the dollar index moving up, Brent oil was the main determining factor in the movement of rupee, giving India a big relief from the high levels at which it had to buy in the past 6 months since the (start of the) Iran war,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
(PTI News)
