Rupee Gains 4 Paise, Reaches 82.87 Against US Dollar in Early Trade

44

In early trade on Monday, the Indian rupee appreciated by 4 paise against the US dollar, trading at 82.87, supported by a weaker American currency against major counterparts globally and inflows of foreign funds into domestic capital markets. Although the rupee received a boost from positive sentiment in the equity markets, it faced pressure from rising crude oil prices.

Starting at 82.86 against the greenback, the rupee strengthened to 82.87, marking a gain of 4 paise from its previous close. On Friday, the rupee had settled 2 paise lower at 82.91 against the US dollar.

Forex and bullion analyst Gaurang Somaiya attributed the rupee’s gains to the dollar’s decline against major currencies and favorable GDP data domestically. The dollar index, which measures the dollar’s strength against six other currencies, edged down slightly to 103.79.

Somaiya noted that the dollar index’s weakness stemmed from US manufacturing PMI dropping to 47.8 from 49.1 in January. Market participants will closely monitor US labor market data and the Fed chairman’s testimony for cues on the dollar’s future direction. Any hawkish statements from the Fed chairman could provide support for the dollar at lower levels.

Meanwhile, Brent crude futures, the global oil benchmark, edged up to $83.63 per barrel, exerting upward pressure on the rupee.

In the domestic equity market, the BSE Sensex rose by 68.88 points to 73,875.03 points, while the NSE Nifty climbed by 6.065.65 points to 22,399.40 points.

India’s forex reserves surged by $2.975 billion to $619.072 billion for the week ended February 23, according to the Reserve Bank of India. Additionally, India’s manufacturing sector witnessed growth to a five-month high in February, as indicated by the HSBC India Manufacturing Purchasing Managers’ Index (PMI), rising from 56.5 in January to 56.9 in February.

Foreign institutional investors (FIIs) were net buyers in the capital markets on Friday, purchasing shares worth Rs 128.94 crore on a net basis, as per exchange data.