Mumbai: The Indian rupee appreciated against the US dollar in early trade on Wednesday. As per forex traders, the local currency was supported by gains in domestic equities and positive macroeconomic data. But, said a surge in global crude oil prices may weigh on the rupee. Over the last few sessions, Brent crude prices have surged to near USD 66 per barrel, which could widen India’s trade deficit. Moreover, foreign fund outflows also contained the appreciation of the domestic unit to some extent.
At the interbank foreign exchange, the domestic currency opened at 85.05 against the US dollar, registering a gain of 31 paise over its previous close. On Tuesday, the rupee reversed early gains to settle flat at 85.36 against the US dollar.
Also Read: Commodity Market: Gold price surge again
Meanwhile, the dollar index, which gauges the US dollar’s strength against a basket of six currencies, was trading lower by 0.05 per cent at 100.95. Foreign institutional investors (FIIs) offloaded Indian equities worth Rs 476.86 crore on a net basis on Tuesday.
On the domestic macroeconomic front, India’s retail inflation eased to a nearly six-year low of 3.16 per cent in April, creating enough room for the Reserve Bank to go for another round of rate cut in the June monetary policy review.
Post Your Comments