Rupee appreciates against dollar, tracking positive domestic equities
The Indian rupee appreciated by 8 paise to 82.93 against the US dollar in early trade on Thursday, tracking positive domestic equities and a weak US currency.
The rupee opened at 82.98 against the dollar and touched a high of 82.93, up 8 paise from its previous close of 83.01.
Domestic equities were trading in the green, with the benchmark Sensex rising 0.30%. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.13% to 104.62.
Oil prices were also up, with Brent crude futures rising 0.37% to USD 92.22 per barrel.
The rupee is expected to trade in a range-bound manner in the near term, as traders await cues from the US retail sales data.
The US retail sales data is scheduled to be released later in the day.
The rupee is likely to remain supported by positive domestic equities and the US dollar’s weakness. However, the appreciation will be capped by elevated crude oil prices.
The Reserve Bank of India (RBI) is likely to remain in a wait-and-see mode and may not intervene in the market unless the rupee depreciates sharply.
The RBI has been intervening in the market to prevent the rupee from depreciating too much. In the past few months, the RBI has sold billions of dollars in the market to prop up the rupee.
The rupee is expected to remain volatile in the near term, as it is buffeted by a number of factors, including the US dollar’s strength, crude oil prices, and the domestic economic outlook.
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