Rupee gains 16 paise to 73.78 against US dollar in early trade

The rupee appreciated by 16 paise to 73.78 against the US dollar in opening trade on Wednesday, supported by the weakening of the American currency in the overseas market and positive domestic equities.

Forex traders said the less hawkish-than-expected statement from Federal Reserve Chairman Jerome Powell calmed fears of aggressive Fed policy tightening and supported emerging market currencies.

At the interbank foreign exchange, the rupee opened at 73.78 against the American dollar, registering a rise of 16 paise from the last close. The local unit also touched 73.90 in early deals.

In the previous session, the rupee had settled at 73.94 against the greenback.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent lower at 95.56.

"The US dollar fell from the highs of the session after Federal Reserve Chair Jerome Powell's testimony signalled that while the Fed will be normalising policy it has not decided on reducing its nearly USD 9 trillion balance sheet," Reliance Securities said in a research note.

On the domestic equity market front, the 30-share Sensex was trading 453.77 points or 0.75 per cent higher at 61,070.66, while the broader NSE Nifty advanced 109.15 points or 0.6 per cent to 18,164.90.

Foreign institutional investors were net buyers in the capital market on Tuesday, as they purchased shares worth Rs 111.91 crore, as per stock exchange data.

Most of the Asian and emerging market pairs are trading stronger on Wednesday morning and could aid sentiments. However, appreciation could be capped as oil continued to strengthen.

Global oil benchmark Brent crude futures fell 0.11 per cent to USD 83.63 per barrel.