In the early trade on Thursday, the Indian rupee strengthened by 2 paise to reach 82.89 against the US dollar, buoyed by a weakened American currency and a downward trajectory in crude oil prices. However, the domestic unit faced challenges due to a volatile equity market and continued foreign fund outflows.
Forex traders cited a cautious sentiment prevailing in the market, with participants eagerly anticipating the release of domestic GDP data later in the day. Despite these factors, the rupee demonstrated resilience, opening at 82.88 and settling at 82.89 against the greenback, marking a 2-paise gain from its previous close. In Wednesday’s session, the rupee had concluded 2 paise lower at 82.91 against the US dollar.
The decline in the US dollar was attributed to the latest macroeconomic data, which hinted at a slightly lower growth rate for the world’s largest economy. Simultaneously, Brent crude futures, the global oil benchmark, experienced a 0.18% dip, reaching $83.53 per barrel.
In the Indian stock market, the 30-share BSE Sensex exhibited a marginal uptick of 68.22 points (0.09%) to stand at 72,373.10 points. The broader NSE Nifty also saw a modest rise of 2.80 points (0.01%) to reach 21,953.95 points.
However, the rupee’s upward momentum faced headwinds from foreign institutional investors (FIIs) who were net sellers in the capital markets on Wednesday. FIIs offloaded shares worth Rs 1,879.23 crore on a net basis, according to exchange data.
Market analysts observed that the rupee’s performance was intricately linked to global economic trends, with the dollar index, measuring the greenback’s strength against major currencies, registering a 0.11% decline at 103.86 on Thursday. The intricate interplay between economic indicators, oil prices, and foreign fund movements underscored the complex dynamics influencing the rupee’s movement in the currency markets.
Check here for the latest updates in Hindi!