Positive Start in Domestic Equity Markets and Drop in Global Crude Oil Prices Boost Rupee
Mumbai, Jun 12 (PTI) - The Indian rupee strengthened by 7 paise to 85.46 against the US dollar in early trade on Thursday, driven by a weak American currency, a decline in global crude oil prices, and a positive opening in the domestic equity markets. However, Foreign Institutional Investor (FII) outflows limited further gains in the local unit, as reported by forex traders.
At the interbank foreign exchange, the rupee started trading at 85.43 against the greenback before rising to 85.46, marking a 7 paise increase from its previous close. The rupee had closed at 85.53 versus the US dollar on Wednesday. "The rupee saw an uptick following a drop in the dollar index yesterday and continued weakness on Thursday, although Asian currencies remained range-bound. The rupee is expected to trade within the range of 85.25-75, with buying interest emerging on dips," stated Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Investors are keenly awaiting Consumer Price Index (CPI) data later in the day, which could influence the trading range for the Indian currency, according to forex experts. Meanwhile, the dollar index, which measures the US dollar against six major currencies, slipped by 0.07 per cent to 99.02.
The weakening dollar was attributed to signals indicating a softer approach in tariff negotiations by the US president and growing expectations of Federal Reserve rate cuts, following subdued CPI inflation figures released on Wednesday. President Trump also hinted at extending the July 9 deadline for trade talks before imposing higher tariffs on countries.
In the stock market, the BSE Sensex gained 108.02 points to reach 82,623.16 early in the session, while the Nifty climbed 38.7 points to 25,180.10. Meanwhile, Brent crude oil prices fell by 0.09 per cent to USD 66.81 per barrel in futures trading. Foreign institutional investors divested equities worth Rs 446.31 crore on a net basis on Wednesday, as per exchange data.
