Rupee rises 45 paise to 81.47 against US dollar

Mumbai: The rupee appreciated by 45 paise to close at 81.47 against the US dollar on Wednesday amid fall in crude oil prices, dollar weakness and sustained foreign fund inflows.

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At the interbank foreign exchange market, the local unit opened at 81.43, and witnessed an intra-day high of Rs 81.23 and low of Rs 81.62 during the session.

The local unit finally settled at 81.47 against the American currency, registering a rise of 45 paise over its previous close.

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On Monday, the rupee had settled at 81.92 against the US dollar. The forex market was closed on Tuesday on account of ‘Gurunanak Jayanti’.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.18 percent to 109.83.

Global oil benchmark Brent crude futures fell 0.64 percent to USD 94.75 per barrel.

“Rupee continued to gain strength as the broader dollar witnessed selling pressure at higher levels. The greenback continued to remain weighed down also ahead of the US mid-term elections results,” said Gaurang Somaiya, Forex and Bullion Analyst, Motilal Oswal Financial Services.

Some market participants suggest a strong chance of Republicans winning a House majority and a tight race for Senate control.

“We expect the USD-INR (Spot) to trade sideways and quote in the range of 81.30 and 81.80,” Somaiya said.

On the domestic equity market front, the 30-share BSE Sensex declined 151.60 points or 0.25 percent to end at 61,033.55, while the broader NSE Nifty fell 45.80 points or 0.25 percent to 18,157.00.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets as they purchased shares worth Rs 1,948.51 crore on Monday, according to exchange data.

“The Indian Rupee appreciated on weak US Dollar and sharp decline in crude oil prices. Dollar declined on rising expectations that Fed may ease its pace of increasing interest rates post jobs market data and expectations of softer inflation data. FII inflows also supported Rupee,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Choudhary further said the rupee is expected to trade with a positive bias on rise in risk appetite in global markets and declining greenback. “Inflows by foreign investors may continue to support the rupee,” he added.

However, traders may remain cautious ahead of inflation data from the US and India later this week. Though crude oil prices have softened, any recovery may cap sharp upside. “USD-INR spot price is expected to trade in a range of Rs 80.30 to Rs 82.20,” Choudhary said.

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