Snapping its two-session slide, the rupee ticked higher by 5 paise to close at 70.41 per US dollar on Thursday on increased selling of the greenback by exporters amid easing crude oil prices. Forex traders said the American currency weakened after minutes of Federal Reserve’s policy meeting triggered uncertainty about future rate hikes.
At the interbank foreign exchange market, the rupee opened weak at 70.49 a dollar against its previous close of 70.46. The local unit moved in a range of 70.66 to 70.32, before finally ending at 70.41, showing a gain of 5 paise. The rupee had depreciated by 78 paise in the previous two sessions.
“The US dollar slipped on Thursday in Asia after the Federal Reserve indicated in the minutes of its December meeting that it was willing to hold off on rate hikes amid concerns about global growth and subdued inflation,” said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.07 per cent to 95.29 in late afternoon trade. “Overall the rupee is expected to be driven by global factors and the upcoming political factors in the domestic market. Near term the rupee is expected to trade in 69.50 to 72 band,” said Rushabh Maru, Research Analyst Anand Rathi Shares and Stock Brokers.
Overnight losses in crude oil also supported early gains in the rupee, analysts said. Brent crude, the global benchmark, was trading at USD 60.95 per barrel, lower by 0.80 per cent.
Meanwhile, foreign funds sold shares worth Rs 344.58 crore on a net basis Thursday, while domestic institutional investors bought equities to the tune of Rs 10.98 crore, provisional data showed.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.5135 and for rupee/euro at 81.4920. The reference rate for rupee/British pound was fixed at 90.1656 and for rupee/100 Japanese yen at 65.40.