Rupee rises 2 paise to 83.12 against U.S. dollar

Analysts said the dollar retreated after the U.S. data released on Wednesday showed increased retail sales in the country.
| Photo Credit: REUTERS

The rupee appreciated 2 paise to settle at 83.12 (provisional) against the U.S. dollar on Thursday, tracking a weak American currency against major rivals overseas.

A weak trend in domestic equity markets and rising crude oil prices kept the movement of the domestic currency restricted, forex traders said.

At the interbank foreign exchange, the domestic currency opened at 83.16 and traded in the range of 83.10 to 83.18 against the greenback. The unit finally settled at 83.12 against the dollar, registering a gain of 2 paise over its previous close.

On Wednesday, the rupee settled 2 paise lower at 83.14 against the U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.15% lower at 103.05 on Thursday.

Analysts said the dollar retreated after the U.S. data released on Wednesday showed increased retail sales in the country, reflecting sustained economic growth and dashing the financial market’s hope of an interest rate cut by the Federal Reserve.

“U.S. dollar softened today on positive global markets. U.S. retail sales and industrial production data topped forecasts, which trimmed rate cut expectations by the Fed in March 2024,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

He said the rupee is expected “to trade with a slight negative bias on weak domestic markets due to an extended sell-off and a rise in crude oil prices due to the escalation of tensions in the Middle East”.

“USD-INR spot price is expected to trade in a range of ₹82.90 to ₹83.50,” Mr. Choudhary added.

Brent crude futures, the global oil benchmark, went up 0.56% to $78.32 per barrel.

On the domestic equity market front, Sensex fell 313.90 points, or 0.44%, to settle at 71,186.86 points. The Nifty also declined 109.70 points, or 0.51%, to 21,462.25 points.

Foreign Institutional Investors (FIIs) were net sellers in the equity market on Wednesday as they sold shares worth ₹10,578.13 crore, according to exchange data.