Indian rupee recovers, rises 12 paise to 83.49 against the US dollar in early trade

Rupee Recovers: The Indian rupee has bounced back from recent lows, showing resilience by appreciating 12 paise to 83.49 against the US dollar in early trading on Thursday. This upward trajectory was bolstered by a positive trend in domestic equities and gains observed in Asian currencies.

Forex traders attributed the rupee's gain to the retreat of the American currency from its previous highs. Opening at 83.51 against the greenback at the interbank foreign exchange market, the rupee further strengthened to touch 83.49 during initial trade, marking a notable rise compared to its previous close.

Earlier in the week, the rupee had experienced a downward spiral, plunging 17 paise to hit its lowest level of 83.61 against the US dollar for the second time in four weeks. However, the currency markets remained closed on Wednesday due to the 'Ram Navami' holiday.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP noted that the rupee's opening around 83.51 was supported by gains in Asian currencies against the dollar. Bhansali projected a trading range of 83.45 to 83.65 for the rupee, highlighting potential dollar purchases by Foreign Portfolio Investors (FPIs) and oil companies, countered by the Reserve Bank of India's (RBI) selling of the American currency. Notably, Bhansali suggested that the RBI might have intervened by USD 2 billion on Tuesday.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading slightly lower at 105.88, down by 0.07 per cent. This dip in the dollar was attributed to market participants assessing the outlook for US interest rates, particularly in light of comments from Federal Reserve officials hinting at a prolonged period of restrictive monetary settings.

In the commodities market, Brent crude futures, the global oil benchmark, experienced a modest uptick of 0.33 per cent, reaching $ 87.58 per barrel.

On the domestic front, the equity markets showed signs of strength, with the 30-share BSE Sensex climbing 226.69 points or 0.31 per cent to 73,170.37 in early trade. The NSE Nifty also advanced, gaining 89.05 points or 0.4 per cent to reach 22,236.95.

In terms of investor activity, Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday, offloading shares worth Rs 4,468.09 crore, according to exchange data.

With PTI Inputs