Mumbai, Apr 23 (PTI) The rupee depreciated 26 paise and settled for the day at 85.45 against the US dollar on Wednesday, on surge in crude oil prices and importer demand for the American currency.
Forex traders said the American currency recovered, supported by Donald Trump’s softened stance — particularly towards the Federal Reserve and China.
However, positive domestic markets and weak US dollar index and foreign fund inflows supported the domestic unit at lower levels.
Forex traders said the market found support after Trump on Tuesday backed off from threats to fire FED Chair Jerome Powell after days of intensifying criticism against him for not cutting rates. Trump also signalled the possibility of lower tariffs against China.
At the interbank foreign exchange, the domestic unit opened at 85.24, and touched an intra-day low of 85.52 against the greenback. The unit ended the session at 85.45, registering a loss of 26 paise over its previous closing level.
On Tuesday, the rupee settled lower by 4 paise at 85.19 against the US dollar.
“The Indian rupee depreciated as the greenback recovered versus major currencies post-US President Donald Trump said he had no intention of firing Federal Reserve Chair Jerome Powell. The short-covering along with bargain buying has been seen in the dollar against rupee,” Dilip Parmar, Research Analyst, HDFC Securities, said.
“Spot USDINR has shown recovery from the lower level but the trend still remained down amid favourable domestic economic activities. In the near term, spot USDINR has resistance at 85.92 and support at 85.03,” Parmar said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.02 per cent at 98.93.
Brent crude, the global oil benchmark, rose 1.32 per cent to USD 68.33 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex climbed 520.90 points, or 0.65 per cent, to settle at 80,116.49, while the Nifty rose 161.70 points, or 0.67 per cent, to 24,328.95.
Foreign institutional investors (FIIs) bought equities worth Rs 3,332.93 crore on a net basis on Wednesday, according to exchange data.
“We expect the rupee to trade with a positive bias amid risk on sentiments in the global markets and FII inflows. Overall weakness in the US dollar may also support the rupee.
“However, rising crude oil prices and importer buying of dollars may cap sharp upside. Traders may take cues from PMI data from the US today. USDINR spot price is expected to trade in a range of 85.20 to 85.80,” said Anuj Choudhary — Research Analyst at Mirae Asset Sharekhan. PTI DRR TRB
This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
