Thursday saw more gains by the rupee, supported by a rise in risk-taking after Iran-Israel ceasefire announcement.
A 41 paise increase led to the rupee settling at 85.67 (provisional) against the US dollar in the backdrop of a sharp drop in the greenback and rising optimism in the markets amid strong domestic equity inflow.
On Wednesday, Indian benchmark indices had risen by a per cent each, even while the US dollar fell towards the 97 mark as crude oil prices continued their decline.
At the interbank foreign exchange, the rupee opened at 85.91 against the US dollar and traded in the range of 85.63-85.93 before settling at 85.67 (provisional).
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On Wednesday, the rupee had settled lower by 3 paise at 86.08 against the US dollar.
Research analyst Jateen Trivedi, who works in commodity and currency at LKP Securities credited an improvement in the global risk sentiment for the rupee gaining. “Rupee gained... buoyed by a sharp drop in the dollar index. With global risk sentiment improving and the potential for continued fund inflows, the rupee may head towards 85.25 in the coming days,” he said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.52 per cent down at 97.10 after strengthening in the previous session.
Brent crude, the global oil benchmark, went up marginally by 0.25 per cent to USD 67.85 per barrel in futures trade.
Mirae Asset Sharekhan’s research analyst Anuj Choudhary said they expected the rupee to continue its gains in the coming days. “We expect the rupee to extend its gains amid a rise in risk appetite in global markets after the announcement of a ceasefire between Iran and Israel,” he said.
However, any more selling by FIIs (Foreign Institutional Investors) may lead to lowering of the domestic unit.
“However, any selling by FIIs and any violation of the ceasefire may pressurise the rupee at lower levels. Traders may take cues from weekly unemployment claims, durable goods orders and pending home sales data from the US. USDINR spot price is expected to trade in a range of 85.30 to 86,” Choudhary said.
Meanwhile, in the domestic equity market, Sensex jumped 1,000.36 points to settle at 83,755.87, while Nifty rose 304.25 points to 25,549.
Foreign institutional investors (FIIs) offloaded equities worth ₹2,427.74 crore on a net basis on Wednesday, according to exchange data.
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