Image is used for representation purpose only. | Image Credit: Reuters
The rupee rose 2 paise to settle at 81.78 (provisional) against the US dollar in a range-bound trade on May 4, tracking the American currency’s weakness in overseas markets.
Forex traders said large foreign fund inflows and crude oil prices trading below $75 per barrel also supported the local unit.
In the interbank foreign exchange market, the local unit opened higher at 81.68 against the US currency but later pared some of the gains to close at 81.78 (provisional), registering a gain of 2 paise over the previous close this.
During the session, the rupee touched a high of 81.65 and a low of 81.84 against the dollar. On May 3, the rupee closed at 81.80 against the US currency.
The dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.04% to 101.30. The US dollar retreated after the Federal Reserve signaled a halt to its year-long rate hike cycle following its latest 25 basis point hike in interest rates.
Global oil benchmark Brent crude futures rose 0.98% to $73.04 a barrel.
The rupee opened the day strong against the dollar but gave up its gains as it fell towards 81.80 throughout the day, said Jateen Trivedi, VP Research Analyst at LKP Securities.
The dollar index was seen trading between 101.04-101.40, and foreign institutional investors (FIIs) were net buyers.
“The rupee’s range will be seen between 81.50-82.00 after the Fed’s desk hinted towards a dovish stance which will help the rupee to continue,” Mr. Trivedi said, adding that softening crude oil prices could also set a positive tone for the rupee.
On the domestic equity market front, the 30-share BSE Sensex advanced 555.95 points or 0.91% to end at 61,749.25 points, and the broader NSE Nifty rose 165.95 points or 0.92% to 18,255.80 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Wednesday as they bought shares worth ₹1,338.00 crore, according to exchange data.
