The rupee gained 9 paise to settle at 88.06 (provisional) against the US dollar on Wednesday as Indian stock markets inched up, crude oil prices softened, and the US dollar index remained weak.
But, with persistent foreign fund outflows amid ongoing trade tensions with the US, forex traders expect the domestic unit to trade near its all-time low levels.
At the interbank foreign exchange market, the rupee opened at 88.15 against the US dollar and then fell to an intraday low of 88.19 and a high of 87.98 against the greenback.
On Tuesday, the rupee had declined 5 paise to close at an all-time low of 88.15 against the USD.
“The Indian rupee strengthened against the U.S. dollar today on positive domestic equities and the softening of crude oil prices at higher levels. Weak U.S. dollar index too favoured the rupee,” said Anuj Choudhary, Research Analyst for Currency and commodities at Mirae Asset ShareKhan.
Also Read: Rupee falls to record low of 88.18 against dollar
Stressing on the fact the rupee will continue to trade with a slight negative bias, Choudhary said overall weakness in the US dollar and a positive tone in the domestic markets may support the rupee at lower levels.
“Traders may take cues from JOLTS job openings and factory orders data from the US Investors may remain cautious ahead of the non-farm payrolls report from the US this week,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.20 per cent to 98.19.
Brent crude, the global oil benchmark, was trading 1.66 per cent lower to $67.99 per barrel in futures trade.
On the domestic equity market front, Sensex jumped 409.83 points to settle at 80,567.71, while Nifty surged 135.45 points to 24,715.05.
Foreign institutional investors offloaded equities worth ₹1,159.48 crore on Tuesday, according to exchange data.
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