The rupee pared early gains and ended the day up 3 paise at 83.87 against the US currency on Monday, hurt by a surge in crude oil prices.
Currency traders said the Indian rupee rose in morning trade on the back of a surge in domestic markets and a weaker US dollar. However, a rise in crude oil prices capped strong gains for the local unit.
At the interbank foreign exchange market, the local unit opened at 83.83 and touched an intraday high of 83.80 against the US dollar and a low of 83.91.
The national currency finally closed at 83.87, up 3 paise from its previous close.
On Friday, the rupee traded in a narrow range and closed up 3 paise at 83.90 against the US currency.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.07% higher at 100.78. The US dollar had seen a sharp correction and fell to the lowest level since July 2023, following dovish comments by Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium.
“We expect the rupee to trade with a slightly positive bias on the global risk sentiment, amid dovish talk from the Federal Reserve and rising expectations of a rate cut by the Fed in September. However, geopolitical tensions in the Middle East and rising crude oil prices may cap the sharp advance,” said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.
Meanwhile, Brent crude, the global oil benchmark, advanced 0.92 per cent to Rs 79.75 per barrel.
In the domestic equity market, the Sensex advanced 611.90 points, or 0.75 per cent, to close at 81,698.11 points. The Nifty rose 187.45 points, or 0.76 per cent, to 25,010.60 points.
Foreign institutional investors (FIIs) were net buyers in the capital markets on Friday as they purchased shares worth Rs 483.36 crore, according to exchange data.
India’s foreign exchange reserves rose by Rs 4,546 crore to Rs 674,664 crore during the week ended August 16, the Reserve Bank of India said on Friday. In the previous week, foreign exchange reserves had fallen by Rs 4,800 crore to Rs 670,119 crore.
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