The domestic currency also closed 3 paise higher against the US dollar and settled at 83. 86 (provisional) to the US dollar. This minor change can, however, be attributed to a robust performance made in the regional equity market, where stocks hit record highs, coupled with a declining US dollar in the global market, causing a rise in the INR vs USD rate.
It was seen that forex traders dated the rupee’s gains to new fund buying that foreign investors pumped into the Indian economy, which in turn helped the domestic currency. However, further appreciation of the rupee was curtailed due to the escalation of crude oil prices in the international market. The domestic currency started the day at 83.83 per US dollar at the interbank foreign exchange market- both at the opening and closing of the session and trading in a narrow range during the middle of the session, as shown below. It reached its intra-day peak on this price level at 83.82 and a low of 83.88 before rebounding to 83.86, higher by 3 paise than the previous day’s close.
In the international market, the US dollar index, which measures green currency against a basket of six leading currencies, edged down 0.01%, trading at 101.33. On the other hand, Brent crude, the international benchmark matured by a paltry 0.18 per cent for the commodity price to trade at $79.80 per barrel, thereby giving some respite to the rupee.
On the domestic front, the equity markets remained fundamentally bullish, supported by the BSE Sensex, which rose by 231.16 points, or 0.28%, to end at an all-time high of 82,365.77 points. Likewise, the Nifty fifty index registered a rise of 83.95 points, or 0.33%, to achieve a new historic high of 25,235.90 points. The positive sentiment in the equity markets was driven by the FII segment which remained net buyers by Rs 3,259.56 crore on Thursday, according to the exchange data.
Overall, emphatic domestic fundamentals coupled with FIIs supported the rupee to a greater extent to continue its rise in the INR vs USD rate.
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