The rupee demonstrated resilience, strengthening by 13 paise to 83.27 against the US dollar in early trade on Thursday. This positive movement followed the weakening of the greenback in global markets after signals from the US Federal Reserve hinted at a potential interest rate cut next year.
Commencing the day with strength, the local unit opened at 83.30 at the interbank foreign exchange market. As trading progressed, it further gained ground, reaching a high of 83.27 in morning deals, marking an increase of 13 paise from the previous close. Notably, the rupee had hit an all-time low of 83.40 on Wednesday in response to a three-month high in retail inflation, recorded at 5.55 percent in November.
The US dollar index, gauging the greenback’s strength against a basket of six currencies, experienced a decline of 0.33 percent, reaching 102.53.
The decision by the US Federal Reserve to maintain its key interest rate unchanged for the third consecutive time was a notable factor. Additionally, officials signaled an expectation of three quarter-point cuts to their benchmark rate in the coming year. Meanwhile, Brent crude futures, the global oil benchmark, saw a modest rise of 0.28 percent, reaching USD 74.47 per barrel.
Within the domestic equity market, the 30-share BSE Sensex displayed notable strength, surging by 778.16 points or 1.12 percent to 70,362.76 points. Simultaneously, the broader NSE Nifty exhibited positive momentum, rallying by 214.75 points or 1.03 percent to 21,141.10 points.
The rupee’s rebound and the overall market movements were influenced by a complex interplay of global economic indicators, Fed policy signals, and domestic factors. As market participants reacted to these dynamics, the currency showcased its ability to respond to varied influences, contributing to a dynamic trading environment.
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