Finance
In early trade on Friday, the rupee traded within a narrow range against the US dollar. Rising local equities provided support, but this was offset by increasing crude oil prices and a robust US currency. Forex traders said the dollar surged after the release of the US inflation figure, which was higher-than-expected and weighed on the domestic currency.
However, the rupee was supported at lower levels by a positive trend in local stocks, with both benchmark indices reaching all-time highs.
The rupee was trading in a limited range on the interbank foreign exchange. It began trading at 83.02 per dollar. It fell to a low of 83.07 versus the US dollar in early trade, down 4 paise from its previous close. On Thursday, the rupee closed 2 paise lower at 83.03 against the US dollar.
Forex dealers predict that the rupee will trade with a small negative bias due to predictions that the US dollar will strengthen higher. Furthermore, rising crude oil prices and selling pressure from foreign investors may put additional pressure on the rupee. However, any Reserve Bank of India action and bullish domestic markets may sustain the currency at lower levels, they said.
In the meantime, the dollar index declined 0.15 percent to 105.28. Brent crude futures, the global oil benchmark, were up 0.5% at USD 94.59 per barrel. The spotlight will be on consumer sentiment and the Empire State Manufacturing Index statistic from the United States, according to Gaurang Somaiya, FX and bullion analyst at Motilal Oswal Financial Services.
“We expect the USDINR (Spot) to trade sideways and quote in the range of 82.80 and 83.20,” Somaiya said. In the domestic equity market, the BSE Sensex advanced 102.84 points or 0.15 per cent to 67,621.84. The NSE Nifty was up 30.25 points or 0.15 per cent to 20,133.35. According to exchange data, Foreign Institutional Investors (FIIs) were net buyers in the capital market on Thursday as they purchased shares worth Rs 294.69 crore.
