The rupee rose 5 paise to 88.10 against the US dollar in early trade on Wednesday. This increase was supported by foreign institutional investor inflows and a weaker greenback. However, moderate gains in global crude oil prices limited sharper appreciation for the local currency.
Forex traders noted the rupee opened at 88.11 at the interbank foreign exchange. It then inched up to 88.10, marking a 5 paise rise from its previous close. This movement reflects ongoing volatility in currency markets.
The rupee had dropped 6 paise on Tuesday to revisit its record low of 88.15. Just days earlier, it touched an all-time intraday low of 88.38 before recovering slightly. These fluctuations highlight the dynamic nature of forex trading.
Anil Kumar Bhansali of Finrex Treasury Advisors LLP pointed to specific factors. Foreign portfolio investors had bought equities on Tuesday. Additionally, a tweet from US President Donald Trump influenced market sentiment.
Trump mentioned that India and the US are continuing trade negotiations. He expressed eagerness to speak with Prime Minister Narendra Modi. Such statements often impact currency movements and investor confidence.
The dollar index, which measures the greenback against six currencies, fell 0.45 percent to 97.90. A weaker dollar typically supports emerging market currencies like the rupee. This external factor played a key role in the day’s gains.
Brent crude futures, the global oil benchmark, rose 0.86 percent to USD 66.96 per barrel. Higher oil prices can pressure the rupee due to India’s significant import needs. This prevented more substantial gains for the currency.
Bhansali attributed the oil price rise to geopolitical tensions. Israel attacked Hamas leadership in Qatar, raising concerns about supply disruptions. Such events often cause volatility in commodity markets.
Domestic equity markets showed positive momentum. The Sensex climbed 363.39 points, or 0.45 percent, to 81,464.71. The Nifty also rose 117.60 points, or 0.47 percent, to 24,986.20 points.
Strong foreign institutional activity supported this rally. Exchange data revealed that FIIs bought equities worth Rs 2,050.46 crore on Tuesday. Investor inflows are crucial for market stability.
The interplay between currency and equity markets is evident. Positive foreign investment boosts both the rupee and stock indices. This synergy often defines trading sessions.
Global factors continue to influence local trends. The dollar’s performance and crude oil prices remain significant drivers. Traders monitor these indicators closely.
Market participants await further developments in US-India trade talks. Political statements can swiftly alter market directions. Staying informed is essential for investors.
The rupee’s movement reflects a complex blend of domestic and international elements. Each trading day brings new data and reactions. Understanding these dynamics helps in navigating financial markets.