Image used for representative purpose only.
| Photo Credit: REUTERS

The rupee appreciated 3 paise to settle at 83.43 (provisional) against the U.S. dollar on Friday, tracking a weak American currency and retreating crude oil prices.

Forex traders said a massive selling in the domestic equity market and outflow of foreign funds capped the gains in the local currency.

At the interbank foreign exchange, the domestic unit opened at 83.40 and moved in the range of 83.34 and 83.44 against the greenback during the session.

The local unit finally settled at 83.43 (provisional) against the dollar, registering a rise of 3 paise from its previous close.

The rupee had settled 3 paise lower at 83.46 against the dollar on Thursday.

Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas, said the rupee gained on a weak U.S. dollar and a decline in crude oil prices. However, weak domestic markets and FII outflows capped sharp gains.

The weak dollar was attributed to the U.S. Federal Reserve’s decision to keep the key interest rate unchanged for the sixth consecutive time, citing slower progress on the inflation front.

Mr. Choudhary further said the rupee is expected to trade with a slight negative bias on weak domestic markets and selling pressure from foreign investors. However, a weak tone and a soft U.S. dollar may support the rupee at lower levels.

“Traders may remain cautious ahead of non-farm payrolls report and ISM services PMI data from the U.S. today. Encouraging non-farm payrolls may support the dollar while dismal data may weigh on the greenback. USD-INR spot price is expected to trade in a range of ₹83.20 to ₹83.60,” he added.

India’s manufacturing PMI fell to 58.8 in April 2024 from 59.1 in the previous month, a monthly survey said on Thursday.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI), however, recorded the second fastest improvement in operating conditions in three-and-a-half years supported by buoyant demand.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined 0.10% to 105.07.

Brent crude futures, the global oil benchmark, slipped 0.04% to $83.64 per barrel.

On the domestic equity market front, Sensex tumbled 732.96 points, or 0.98%, to settle at 73,878.15, and Nifty tanked 172.35 points, or 0.76%, to close at 22,475.85.

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

Image used for representative purpose only

The rupee rose 4 paise to 83.01 against the US dollar in early trade on Friday, tracking positive cues from domestic equity markets.

Forex traders said a strong American currency and elevated crude oil prices, however, weighed on the local unit.

At the interbank foreign exchange, the domestic currency opened at 83.03 and inched up to 83.01 against the greenback in initial deals, registering a gain of 4 paise from its previous close.

On Thursday, the rupee settled 3 paise lower at 83.05 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was 0.12% up at 104.32.

Brent crude futures, the global oil benchmark, were trading 0.07% lower at USD 82.80 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 302.55 points or 0.42% higher at 72,352.93 points. The broader NSE Nifty advanced 95.90 points or 0.44% to 22,006.65 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday as they sold shares worth ₹3,064.15 crore, according to exchange data.

Government data released on Thursday showed the country’s exports increased 3.12% on-year to USD 36.92 billion in January. Imports rose by about 3% to USD 54.41 billion and the trade deficit stood at USD 17.49 billion.

The rupee consolidated in a narrow range and depreciated by 2 paise to close at 83.04 (provisional) against the U.S. dollar on Thursday, tracking a strong American currency and elevated crude oil prices in the international market.

Forex traders said the Indian currency depreciated as foreign fund outflows weighed on the rupee. However, positive domestic markets cushioned the downside.

At the interbank foreign exchange market, the local unit opened at 83.00 and finally settled at 83.04 (provisional) against the dollar, down by 2 paise from its previous close.

During the day, the rupee witnessed a range-bound movement. It saw an intra-day high of 82.99 and a low of 83.04 against the American currency.

On Wednesday, the rupee appreciated 6 paise to close at 83.02 against the U.S. dollar.

“We expect the rupee to trade with a slight positive bias on rise in risk appetite in global markets and a negative tone in the U.S. dollar. Overnight decline in global crude oil prices and better than expected trade balance may further support rupee,” said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

However, concerns over FII outflows may cap sharp upside.

“Any recovery in the U.S. dollar may also weigh on the rupee at higher levels. Traders may take cues from retail sales, industrial production, Empire State Manufacturing Index and weekly unemployment claims data from the U.S. USD-INR spot price is expected to trade in a range of ₹82.80 to ₹83.20,” Mr. Choudhary added.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was 0.10% down at 104.61.

Brent crude futures, the global oil benchmark, was trading 0.40% lower to $81.27 per barrel.

On the domestic equity market front, Sensex advanced 227.55 points, or 0.32%, to settle at 72,050.38 points. The Nifty fell 70.70 points, or 0.32%, to 21,910.75 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they sold shares worth ₹3,929.60 crore, according to exchange data.

On the domestic macroeconomic front, the country’s exports increased 3.12% on-year to $36.92 billion in January, according to the data released by the government on Thursday.

Imports rose by about 3% year-on-year to $54.41 billion in January this year and trade deficit stood at $17.49 billion.

The rupee plunged by 35 paise to close at 83.06 (provisional) against the U.S. dollar on Tuesday, amid a strong American currency and higher crude oil prices.

Foreign fund outflows from the domestic equity markets also weakened the local currency.

At the interbank foreign exchange market, the local unit opened at 82.78 against the U.S. dollar and hit the lowest level to settle at 83.06 (provisional) against the greenback, registering a fall of 35 paise against its previous close.

The rupee has breached the 83-level against the dollar for the fifth time since August 14.

On Monday, the rupee had settled at 82.71 against the dollar.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee depreciated due to strong dollar and weak Asian currencies. “Weak global markets and disappointing macroeconomic data from India also weighed on rupee.” The U.S. dollar strengthened on safe haven demand amid risk aversion in global markets while the rupee was under pressure after the latest survey showed India’s services activity index declined to 60.1 in August from 62.3 in July.

“We expect rupee to trade with a negative bias on strong US dollar and elevated crude oil prices. Risk-off sentiments in global markets may also put downside pressure on the local currency.

“… any intervention by the Reserve Bank of India may also prevent sharp fall in rupee. USD-INR spot price is expected to trade in a range of ₹82.60 to ₹83.50,” Mr. Choudhary said.

Brent crude futures, the global oil benchmark, was trading 0.66% lower to $88.41 per barrel.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, climbed by 0.38% to 104.64.

On the domestic equity market front, the 30-share BSE Sensex closed 152.12 points or 0.23% higher at 65,780.26 points. The broader NSE Nifty advanced 46.10 points or 0.24% to 19,574.90 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Monday as they offloaded shares worth ₹3,367.67 crore, according to exchange data.