Mumbai, Nov 6 The rupee surged 43 paise to close at 93.98 against the US dollar on Friday, as a softer US dollar coupled with declining crude oil prices and easing concerns over import costs supported investor sentiments.
Forex traders said a surge in domestic markets and fears of a slowdown in AI spending also supported the rupee.
At the interbank foreign exchange market, the rupee opened at 94.50 and touched an intraday high of 93.82 and a low of 94.50. The domestic unit closed the session at 93.98, registering a gain of 43 paise over its previous close.
On Thursday, the rupee settled 5 paise higher at 94.41 against the US dollar.
Anil Kumar Bhansali, Executive Director and Head of Treasury, Finrex Treasury Advisors LLP, said the rupee rose as the RBI, which did not allow the rupee to rise above 94.30 in the past five months, left the level and inflows worth USD 1.5 billion from FPIs were left to be sold in the market.
“The positivity in India arose mainly after (US President) Donald Trump lost the elections and the US equities lost 2.3 trillion dollars in market cap. KOSPI and Nikkei also fell due to the AI sell-off, with Nikkei and Nasdaq in the bear market category,” Bhansali added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 102.04, higher by 0.49 per cent.
Brent crude, the global oil benchmark, was trading higher by 2.04 per cent at USD 100.30 per barrel in futures trade.
On the domestic equity market front, Sensex jumped 1,718.01 points to settle at 81,028.02, and Nifty surged 493.75 points to 25,030.35.
Foreign institutional investors (FIIs) purchasing equities worth Rs 13,749.82 crore on Friday, according to exchange data.
“We expect the rupee to trade with a positive bias on strength in domestic markets and rising FII inflows. Weakness in the dollar post US mid-term elections and a decline in US Treasury yields may also support the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.
However, tensions between Ukraine and Russia and attacks in the Middle East may cap sharp upside.
“Traders may take cues from the non-farm payrolls report from the US. USDINR spot price is expected to trade in a range of 93.65 to 94.20,” Choudhary added.
Further, India’s forex reserves dropped USD 2.691 billion to USD 717.056 billion during the week ended October 30, the RBI said on Friday.
(PTI News)
