Rupee vs Dollar: Domestic currency rises 9 paise to close at 82.96 against American dollar

Currency market update: The rupee (INR) settled at 82.96 (provisional) against the US dollar on Wednesday, February 7. Tracking a correction in the greenback against major currencies and fresh foreign capital inflows, the local currency registered a gain of 9 paise for the day from its previous close. Throughout the session, the domestic currency oscillated within a range of 82.94 - 83.09.

However, a rise in crude oil prices and muted domestic markets capped the sharp gains in the domestic unit, said PTI citing forex traders.

At the interbank foreign exchange, the rupee began the day at 83.03 against the dollar and fell to as low as 83.09 during the session before settled at 82.96 against the greenback for the day. The currency hit an intraday high of 82.94

"We expect the rupee to trade with a slight positive bias on a rise in global risk sentiments and a soft US Dollar. However, the surge in crude oil prices and hawkish comments from various major central bank officials may cap the sharp upside," said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

Traders may take cues from trade balance data from the US. Investors may remain cautious ahead of the RBI's monetary policy decision on Thursday. "RBI is expected to keep its monetary policy unchanged. USD/INR spot price is expected to trade in a range of Rs 82.60 to Rs 83.30," Choudhary said.

Meanwhile, the dollar index — which measures the value of the American currency against six peers other than the rupee — was last seen trading 0.17 per cent lower at 104.04.

"The US Dollar eased as traders booked profits after the greenback rose sharply over the previous two sessions. Positive tone in Euro and Pound amid hawkish comments from ECB officials also weighed on Dollar," Choudhary added.

Brent crude futures, the global oil benchmark, rose 0.52 per cent to USD 79 per barrel.

Contrast to this, domestic equity benchmarks Sensex declined by 0.05 per cent. The 30-share benchmark BSE Sensex declined 34.09 points for the day to settle at 72,152.00 points, while the broader NSE Nifty rose 1.10 points, or 0.01 per cent, to 21,930.50 points.

On Tuesday, February 6, the rupee declined 2 paise to settle at 83.05 against the American dollar. According to exchange data, foreign institutional investors (FIIs) were net buyers in the capital markets on Tuesday as they purchased shares worth Rs 92.52 crore

With PTI Inputs