Rupee rises 7 paise to close at 83.23 against U.S. dollar

The rupee appreciated 7 paise to close at 83.23 against the U.S. dollar on Thursday, helped by a bullish trend in domestic equities and weakness of the American currency in the overseas market.

However, rising crude oil prices capped sharp gains for the local unit, forex traders said.

At the interbank foreign exchange market, the local unit opened flat at 83.30 against the greenback.

The rupee oscillated between an intra-day low of 83.32 and a high of 83.21 against the greenback and finally settled at 83.23 against the dollar, higher by 7 paise from its previous close.

The rupee gained for the second day in a trot following a weaker greenback after mixed signals from the Federal Open Market Committee (FOMC) meeting minutes.

“Better-than-expected service PMI number pushed the euro higher versus the U.S. dollar. The rupee also accumulated the gain along with other Asian currencies after Eurozone data. However, the local unit trimmed the afternoon gains amid higher crude oil prices and importers’ dollar demand,” Dilip Parmar, Research Analyst, HDFC Securities, said, adding that “Spot USD/INR is expected to consolidate between 83.10 and 83.50”.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.32% lower at 102.16.

Brent crude futures, the global oil benchmark, advanced 1.05% to $79.07 per barrel.

On the domestic equity market front, Sensex surged 490.97 points, or 0.69%, to settle at 71,847.57 points. The Nifty advanced 141.25 points, or 0.66%, to 21,658.60 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they sold shares worth ₹666.34 crore, according to exchange data.

On the domestic macroeconomic front, India’s manufacturing sector growth fell to an 18-month low in December amid a softer increase in factory orders and output despite minimal inflation.

The HSBC India Manufacturing PMI survey, conducted by S&P Global, showed that there was a softer, albeit sharp, increase in factory orders and output, while business confidence towards the year-ahead outlook strengthened.