Rupee Ends the Day 18 Paise Higher Against the USD

pexels

 

On Friday, the rupee strengthened 18 paise to a provisional close of 81.18 against the US dollar.

However, sluggish domestic equities and a rise in crude oil prices restrained the local currency's rapid advances, according to forex traders.

The local unit in the interbank foreign currency market started out well at 81.24 and ended the day at 81.18 (provisional), gaining 18 paise from its previous close.

The local currency experienced an intraday high of 81.09 and a low of 81.28 versus the US dollar during the trading session.

The rupee's closing value versus the US dollar on Thursday was 81.36.

The dollar index, which measures the value of the dollar relative to a basket of six different currencies, increased by 0.21 percent to 102.26.

Brent crude futures, the benchmark for all crude oil, increased 0.48 percent to USD 86.57 per barrel.

Anuj Choudhary, a research analyst at Sharekhan by BNP Paribas, claims that the weaker US dollar and Thursday's FII inflows caused the Indian rupee to strengthen on Friday.

Following poor economic statistics from the US, the dollar decreased due to rising probabilities of a 25 basis point rate hike by the FOMC, Choudhary added.

Lael Brainard, the vice chair of the US Federal Reserve, hinted that the US Fed might raise rates by 25 basis points (bps) more slowly at its upcoming Federal Open Market Committee (FOMC) meeting in February. The US Fed is also anticipated to maintain higher rates for a longer period of time in order to contain inflation.

"On the back of a weaker dollar, we anticipate the rupee to trade favourably. However, worries about global economic growth and a rise in crude oil prices might limit a significant upward trend.

"Data on existing home sales and remarks from FOMC members may be of interest to traders. The projected range for the USD/INR spot price is 80.50 to 81.80, according to Choudhary.

The 30-share BSE Sensex slid 236.66 points or 0.39 percent to close at 60,621.77 on the domestic equities market, while the larger NSE Nifty fell 80.20 points or 0.44 percent to close at 18,027.65.

According to exchange data, Foreign Institutional Investors (FIIs) were net purchasers on Thursday in the capital market, buying shares worth 399.98 crore.