The rupee recovered from its all-time low level and settled for the day with gains of just 3 paise at 84.72 (provisional) against the US dollar in a range-bound trade on Thursday, amid a positive trend in domestic equities. Forex traders said the Indian rupee recovered slightly on strength in the domestic markets and overnight decline in crude oil prices. However, a positive US dollar capped a sharp upside.
At the interbank foreign exchange, the rupee opened at 84.72, moved in a narrow range and touched an intraday high of 84.70 and a low of 84.74 against the greenback.
On Wednesday, the rupee slumped by 7 paise to hit its lowest-ever closing level of 84.75 against the US dollar.
“We expect the rupee to trade with a negative bias on the strong dollar and worries over economic slowdown. However, weakness in crude oil prices and fresh FII outflows may support the rupee at lower levels,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.
Choudhary further added that traders may take cues from weekly unemployment claims and trade balance data from the US. “USD-INR spot price is expected to trade in a range of Rs 84.50 to Rs 84.95,” he said.
Moreover, market participants are also awaiting cues from the upcoming Reserve Bank of India (RBI) monetary policy on Friday, which will likely focus on balancing inflation and growth.
The Reserve Bank’s high-level panel on Wednesday started deliberations on the bi-monthly monetary policy amid expectations of status quo on interest rate as the retail inflation is above the upper tolerance level of the central bank.
The decision taken by the RBI Governor Shaktikanāta Das headed six-member Monetary Policy Committee (MPC) will be announced on Friday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.16 per cent at 106.15.
Brent crude, the global oil benchmark, rose by 0.53 per cent to USD 72.69 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex closed 809.53 points, or 1 per cent higher, at 81,765.86. The Nifty rose 240.95 points, or 0.98 per cent, to settle at 24,708.40 points.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, as they purchased shares worth Rs 1,797.60 crore, according to exchange data.
