Rupee Appreciates by 3 Paise to 83.10 Against US Dollar in Early Trade
On Tuesday, the rupee appreciated by 3 paise to 83.10 against the US dollar, buoyed by a positive trend in domestic equities and a weaker American currency in the overseas market. This rise follows a decline on Monday when the rupee settled 3 paise lower at 83.13 against the US dollar.
Key Highlights:
- Opening Trade: At the interbank foreign exchange market, the rupee opened at 83.14 and gained further ground to trade at 83.10 against the greenback.
- Market Sentiment: Forex traders noted that the rupee is likely to maintain a positive bias due to the favorable trend in domestic equities and expectations of fresh foreign inflows. However, rising crude oil prices could limit significant gains.
- RBI Influence: Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, mentioned that importers should keep buying during dips as the Reserve Bank of India (RBI) might not allow a substantial downward move for the USD/INR pair.
- Dollar Index and Crude Oil: The dollar index, which measures the greenback’s strength against a basket of six currencies, was trading at 104.42, down by 0.12%. Brent crude futures, the global oil benchmark, increased by 0.24% to $83.30 per barrel.
- Equity Market Performance: The 30-share BSE Sensex was up by 124.2 points or 0.16% at 75,514.70 points, while the broader NSE Nifty rose by 47.95 points or 0.21% to 22,980.40 points in initial trade.
- FII Activity: Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday, offloading shares worth Rs 541.22 crore.
Projections:
- Near-Term Outlook: Amit Pabari, MD of CR Forex Advisors, indicated that the rupee might appreciate to around 82.80-82.50 in the near term.
- Medium-Term Outlook: Medium-term projections suggest the rupee could range between 82.20 and 82.00, influenced by the performance of Indian equities and investor positioning ahead of the Lok Sabha election results scheduled for June 4.
