Mumbai: The rupee appreciated 8 paise to 88.62 against the US dollar in early trade on Thursday amid a weak American currency and lower level of crude oil prices overseas.
Positive sentiment in domestic equity markets also supported the Indian currency even though selling pressure from foreign investors prevented a sharp gain, forex traders said.
At the interbank foreign exchange, the rupee opened at 88.51 and went up to 88.49 before trading at 88.62 against the greenback in early deals, up 8 paise from its previous closing level.
On Monday, foreign investors bought net equities worth ₹1,992.87 crore, offering a crucial cushion for the currency amidst global uncertainties.
Despite these tailwinds, upward momentum for the rupee remained limited due to persistent global headwinds. Crude oil prices edged higher, with Brent crude futures rising 0.33% to $67.26 per barrel, while the US dollar index also advanced 0.2% to 99.13, reflecting strength against a basket of major currencies.
These developments typically exert downward pressure on emerging market currencies, including the rupee. Nevertheless, the domestic unit managed to hold firm within its recent trading band of ₹85 to ₹86, amid expectations of continued foreign inflows and stable economic fundamentals.
Investor attention remained focused on international developments, particularly US-China trade negotiations. Progress in those talks continues to shape broader risk sentiment and influence currency markets.
Adding to the supportive domestic environment, benchmark equity indices opened on a strong note.
The BSE Sensex rose by 99.12 points to 82,544.33, while the NSE Nifty advanced 32.15 points to 25,135.35. This equity rally further bolstered the rupee’s early trade strength.
In summary, the rupee’s rise in early trade reflected a combination of favourable domestic factors, including equity gains and capital inflows, even as global challenges such as stronger oil prices and a firm US dollar moderated the extent of appreciation. The currency is expected to remain range-bound in the near term, with daily movements shaped by both local and international drivers
