Rupee rises 12 paise to close at 82.05 against U.S. dollar

At the interbank foreign exchange market, the Indian rupee opened at 82.14 against the U.S. dollar. Image for representation purpose only. File
| Photo Credit: Reuters

The rupee gained 12 paise to close at 82.05 (provisional) against the U.S. dollar on July 17, as domestic equity benchmarks scaling all-time high levels and weakness in the American currency overseas boosted investor sentiments.

Besides, steady foreign fund inflows into domestic capital markets also supported the local unit, forex traders said.

At the interbank foreign exchange market, the local unit opened at 82.14 against the U.S. dollar and settled 12 paise higher at 82.05 (provisional) against the previous close.

During the day, the domestic unit witnessed an intra-day high of 82.03 and a low of 82.20.

On Friday, the rupee had closed at 82.17 against the dollar.

The rupee traded with a slight positive bias on positive domestic markets and a soft dollar. The domestic equity market touched fresh all-time highs, boosting the domestic currency.

The U.S. dollar is trading near its lowest levels in 15 months on rising odds of just one more rate hike by the U.S. Federal Reserve due to faster-than-expected cooling in inflation, said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

“We expect the rupee to trade with a slight positive bias on account of the rise in risk appetite in global markets and the weakness in the U.S. Dollar.

“A decline in crude oil prices and foreign inflows may also support the rupee. However, concerns over global economic slowdown may cap a sharp upside. Market participants may remain cautious ahead of retail sales data from U.S. and U.K.’s inflation data this week. We expect the USD/INR spot to trade between 81.60 to 82.50 in the near term,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.12% to 99.79.

Brent crude futures, the global oil benchmark, declined 1.94% to $78.32 per barrel.

On the domestic equity market front, the 30-share BSE Sensex closed 529.03 points or 0.80% higher at 66,589.93. The broader NSE Nifty rose 146.95 points or 0.75% to 19,711.45.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they purchased shares worth ₹2,636.43 crore, according to exchange data.

FPIs’ flow into the Indian equity market remained unabated as they invested over ₹30,600 crore in the first fortnight of this month, driven by the country’s robust economic growth and strong corporate earnings.

Meanwhile, India’s foreign exchange reserves jumped $1.229 billion to $596.28 billion in the week ended July 7, the Reserve Bank of India said on Friday.

In the previous week, the overall forex reserves increased by $1.85 billion to $595.05 billion.