Rupee Gains Against Dollar Amidst Strong Equity Sentiment

Rupee gains: In early tre on Friday, Indian rupee strengned by 9 paise to reach 83.37 against US dollar. This rise was attributed to robust sentiment in domestic equity markets and a weaker American currency against major rivals globally.

Although rupee experienced growth, forex trers noted that outflow of foreign funds and persistent high crude oil prices acted as limiting factors on Indian currency.

At interbank foreign exchange, rupee opened strong at 83.40 and peaked at 83.36 against greenback during session.

During morning deals, local unit settled at 83.37 against dollar, marking a gain of 9 paise from its previous closing level. On preceding day, rupee h concluded 3 paise lower at 83.46 against dollar.

According to Gaurang Somaiya, a Forex and bullion analyst at Motilal Oswal Financial Services Ltd, dollar faced downward pressure against major crosses following US Federal Reserve's decision to keep key interest rate unchanged for sixth consecutive time. ditionally, concerns over ongoing pressures and a tight labour market signalling a slowdown in achieving 2 per cent inflation target for year contributed to dollar's weakness.

Market observers anticipate scrutiny of US non-farm payroll data scheduled for release on Friday. ditionally, indicators such as weekly unemployment claims, tre balance, and factory order data from US are expected to offer furr insights.

Somaiya highlighted that focus would be on non-farm payroll data, with expectations of a marginal decrease potentially affecting greenback. Besides payrolls, volatility in dollar could be triggered by services PMI number. Somaiya forecasted USD-INR (Spot) to tre sideways within a range of 83.20-83.50.

In or economic news, India's manufacturing PMI for April 2024 dipped to 58.8 from 59.1 in previous month, as reported by a monthly survey on Thursday. Despite this decline, seasonally justed HSBC India Manufacturing Purchasing Managers' Index (PMI) noted second-fastest improvement in operating conditions in three-and-a-half years, supported by robust demand.

Meanwhile, dollar index, measuring greenback's strength against a basket of six currencies, witnessed a slight decline of 0.04 per cent to 105.13. Brent crude futures, global oil benchmark, rose by 0.36 per cent to USD 83.97 per barrel.

In domestic equity market, 30-share BSE Sensex surged by 463.87 points or 0.62 per cent to 75,074.98. Similarly, broer NSE Nifty climbed 136.65 points or 0.60 per cent to 22,784.85.

Foreign institutional investors (FIIs) were net sellers in capital markets on Thursday, with shares worth Rs 964.47 crore sold on a net basis, according to exchange data.