Rupee rises eight paise to close at 83.16 against U.S. dollar

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| Photo Credit: The Hindu

The Rupee appreciated eight paise to close at 83.16 against the U.S. dollar on January 5, helped by a positive trend in domestic equities and fresh foreign capital inflows.

“However, rising crude oil prices in international markets and a strong greenback overseas restricted gains for the local unit,” forex traders said. At the interbank foreign exchange market, the local unit opened flat at 83.23 against the greenback.

The Rupee oscillated between an intra-day low of 83.24 and a high of 83.12 against the greenback and finally settled at 83.16, higher by eight paise from its previous close of 83.24.

“The Indian Rupee remained the second-best performer among the Asian currencies following Chinese currencies. The dollar inflows and stable crude oil prices helped the Rupee to buck the past two week’s bearish trend,” said Dilip Parmar, Research Analyst at HDFC Securities.

“The expectations of a strong December U.S. jobs report could temporarily reverse the soft-landing playbook,” Mr. Parmar said.

“Traders will also closely watch India’s 2024 growth forecast for next week’s Rupee directions,” Mr. Parmar said, adding that from the level front, spot USD/INR has support at 83.10 and resistance at 83.35.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.25% lower at 102.68. Brent crude futures, the global oil benchmark, advanced 0.90% to $78.29 per barrel.

On the domestic equity market front, Sensex surged 178.58 points, or 0.25%, to settle at 72,026.15 points. The Nifty advanced 52.20 points, or 0.24%, to 21,710.80 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday as they bought shares worth ₹1,513.41 crore, according to exchange data.

On the domestic macroeconomic front, the services sector growth in India rose to a three-month high in December supported by favourable economic conditions and positive demand trends.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 56.9 in November to 59 in December, highlighting a sharp increase in output that was the most pronounced since September.