Rupee gains 14 paise to end at 82.66 against US dollar
1 min read 24 May 2023, 09:05 AM ISTThe dollar was near a two-month high as US debt ceiling negotiations dragged on. The dollar index which tracks the US currency against six major peers was flat at 103.5, just below Tuesday's 103.65, its highest since March.
PremiumThe Indian rupee ended 14 paise higher against the US dollar on Wednesday, registering gains for the second consecutive day, led by a softer dollar and possible FII inflow. The local unit opened at 82.83 a dollar and rose 14 paise during the day to end at 82.66 as compared to the previous close of 82.80.
The dollar was near a two-month high as US debt ceiling negotiations dragged on. The dollar index which tracks the US currency against six major peers was flat at 103.5, just below Tuesday's 103.65, its highest since March.
“Indian Rupee gained on soft dollar and FII inflows. However, weak domestic markets capped sharp gains. US dollar gained on Wednesday’s safe-haven appeal as the debt ceiling impasse continues, keeping the markets nervous. Mixed to positive economic data from the US also supported the greenback," said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.
Choudhary expects rupee to trade with a negative bias on risk aversion in global markets and a surge in crude oil prices.
Meanwhile, crude oil prices rose after data showed US inventories and fuel supplies tightening. Saudi energy minister's warning to speculators raised the prospect of further OPEC output cuts, lifting the oil prices.
Brent crude futures or 1.2% to $77.72 a barrel, while US West Texas Intermediate crude (WTI) traded 1.3% higher at $73.89 a barrel.
Also Read: Crude oil prices likely to remain elevated. Here's why
“Deadlock over the debt ceiling talks has deteriorated global risk sentiments. However, FII inflows may support rupee at lower levels. Traders may remain cautious ahead of FOMC minutes for cues on Fed’s policy meeting in June," Choudhary added.
He expects the USDINR spot to trade between 82.30 to 83.30 in the near term.
On the domestic front, the Indian equity indices ended lower dragged by selling in metals and banking stocks. The Sensex fell 208.01 points, or 0.34%, to close at 61,773.78, and the Nifty ended 62.60 points, or 0.34%, lower at 18,285.40
On Tuesday, the Foreign Institutional Investors (FII) net bought Indian shares worth ₹182.51 crore, while the Domestic Institutional Investors (DII) net purchased shares worth ₹397.29 crore, provisional data from the exchanges showed.
