Rupee Gains Against Dollar Amidst Strong Equity Sentiment

Rupee gains: In early trade on Friday, the Indian rupee strengthened by 9 paise to reach 83.37 against the US dollar. This rise was attributed to robust sentiment in the domestic equity markets and a weaker American currency against major rivals globally.Although the rupee experienced growth, forex traders noted that the outflow of foreign funds and the persistent high crude oil prices acted as limiting factors on the Indian currency.At the interbank foreign exchange, the rupee opened strong at 83.40 and peaked at 83.36 against the greenback during the session.During morning deals, the local unit settled at 83.37 against the dollar, marking a gain of 9 paise from its previous closing level. On the preceding day, the rupee had concluded 3 paise lower at 83.46 against the dollar.According to Gaurang Somaiya, a Forex and bullion analyst at Motilal Oswal Financial Services Ltd, the dollar faced downward pressure against major crosses following the US Federal Reserve's decision to keep the key interest rate unchanged for the sixth consecutive time. Additionally, concerns over ongoing pressures and a tight labour market signalling a slowdown in achieving the 2 per cent inflation target for the year contributed to the dollar's weakness.Market observers anticipate scrutiny of the US non-farm payroll data scheduled for release on Friday. Additionally, indicators such as weekly unemployment claims, trade balance, and factory order data from the US are expected to offer further insights.Somaiya highlighted that the focus would be on the non-farm payroll data, with expectations of a marginal decrease potentially affecting the greenback. Besides payrolls, volatility in the dollar could be triggered by the services PMI number. Somaiya forecasted the USD-INR (Spot) to trade sideways within a range of 83.20-83.50.In other economic news, India's manufacturing PMI for April 2024 dipped to 58.8 from 59.1 in the previous month, as reported by a monthly survey on Thursday. Despite this decline, the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) noted the second-fastest improvement in operating conditions in three-and-a-half years, supported by robust demand.Meanwhile, the dollar index, measuring the greenback's strength against a basket of six currencies, witnessed a slight decline of 0.04 per cent to 105.13. Brent crude futures, the global oil benchmark, rose by 0.36 per cent to USD 83.97 per barrel.In the domestic equity market, the 30-share BSE Sensex surged by 463.87 points or 0.62 per cent to 75,074.98. Similarly, the broader NSE Nifty climbed 136.65 points or 0.60 per cent to 22,784.85.Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday, with shares worth Rs 964.47 crore sold on a net basis, according to exchange data.

Advertisement

Rupee Gains Against Dollar Amidst Strong Equity Sentiment

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

Advertisement