The rupee strengthened by 18 paise to 86.26 against the US dollar in the morning trading session on Friday, supported by positive domestic equities and a weaker American currency index.
According to forex traders, the local unit was bolstered by weak crude oil prices and positive domestic market conditions, although ongoing foreign fund outflows put pressure on the rupee.
Market analysts highlighted the significance of the upcoming Union Budget in influencing market sentiment and the trajectory of the rupee.
Starting at 86.31 against the US dollar, the rupee reached a high of 86.26, marking an increase of 18 paise compared to its previous close. It also touched 86.33 against the US dollar in early trade.
On Thursday, the rupee had depreciated by 9 paise to settle at 86.44 against the US dollar.
The rupee has displayed resilience over the past two trading sessions, benefiting from a weakening dollar. Additionally, anticipated inflows from IREDA’s fundraising activities worth $570 million are expected to provide further support to the rupee, according to CR Forex Advisors MD Amit Pabari.
The dollar index, which measures the greenback’s strength against a basket of six currencies, was down by 0.15 percent at 107.88.
Brent crude, the global oil benchmark, dropped by 0.22 percent to $78.12 per barrel.
In the domestic equity market, both the Sensex and Nifty indices opened positively. The Sensex was up by 166.71 points or 0.22 percent at 76,687.09, while the Nifty rose by 49.30 points or 0.21 percent to 23,254.65.
Foreign Institutional Investors (FIIs) continued to be net sellers in the capital markets on Thursday, offloading shares worth ₹5,462.52 crore, as per exchange data.
Overall, the rupee’s future movement may be impacted by various factors, including the global economic landscape and domestic market conditions. The upcoming Union Budget will be closely watched for any announcements that could influence market sentiment and the rupee’s performance.
