The rupee pared its initial losses and settled for the day 14 paise higher at 94.36 (provisional) against the US dollar, as both US and Iran signed the MoU, boosting global market sentiments. The domestic unit opened weaker, after a hawkish shift in the Federal reserve’s latest policy projections.
At the interbank foreign exchange, the rupee opened at 94.66 against the US dollar and traded in the range of 94.18-94.71. Eventually, it settled at 94.36 (provisional), up 14 paise from its previous close.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.59, higher by 0.51 per cent.
On Wednesday, the rupee appreciated 10 paise to close at 94.50 against the US dollar.
Experts attributed the change in direction to fixing-related selling in the USD/INR pair. The central bank was active in small pockets through the day to absorb the dollar inflows, he added. Exporters were the dominant force in the dollar/rupee market, with aggressive dollar sales adding strong downward pressure on the pair, – a trader said.
Lower oil prices typically support the rupee by easing India’s import bill and reducing dollar demand from oil companies.