The Indian rupee strengthened by 6 paise to 90.89 against the US dollar in early trading on Wednesday, supported by a weaker dollar index and a firm opening in domestic equity markets.
The local currency opened at 90.94 in the interbank foreign exchange market before advancing to 90.89, marking a gain of 6 paise from its previous close.
Dollar Index Eases, But Crude Oil Caps Upside
The broader US dollar index, which tracks the greenback against a basket of six major currencies, slipped 0.07% to 97.77. The softer dollar lent support to emerging market currencies, including the rupee.However, the upside remained limited as global crude oil prices surged sharply. Brent crude futures rose 1.37% to $71.74 per barrel. Higher oil prices typically weigh on the rupee, given India’s dependence on crude imports.
Forex traders also pointed to continued outflows by foreign institutional investors as a restraining factor for the currency.
Rupee Ends Previous Session at 90.95
On Tuesday, the rupee traded within a narrow band and settled 6 paise lower at 90.95 against the US dollar.Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, noted that dollar buying persisted through the session, resulting in minimal movement in the local currency. He indicated that the trading range for the day could remain between 90.75 and 91.25, with buyers continuing to purchase dollars.
Equity Markets Rebound Sharply
Domestic benchmark indices opened strongly, providing support to the rupee.The Sensex climbed 558.79 points to 82,784.71, while the Nifty advanced 157.05 points to 25,581.70 in early trade.
Despite the rebound in equities, foreign institutional investors remained net sellers. On Tuesday, FIIs offloaded equities worth ₹102.53 crore, according to exchange data.
Key Drivers to Watch
- Rupee opened at 90.94 and strengthened to 90.89
- Dollar index eased to 97.77
- Brent crude rose to $71.74 per barrel
- Sensex and Nifty posted strong early gains
- FIIs sold equities worth ₹102.53 crore
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