Indian Rupee Appreciates 27 Paise, Closing at 94.22 Against US Dollar

Indian Rupee Posts Gains against US Dollar

The Indian rupee closed on a positive note on Thursday, appreciating by 27 paise to settle at 94.22 against the US dollar. This gain comes despite initial losses, as global markets witnessed a rise in investor risk appetite due to hopes of peace between the US and Iran.

Brent crude oil prices have fallen below USD 100 per barrel, which is attributed to the increase in investor risk appetite. However, factors such as unabated foreign capital outflows and safe-haven dollar demand from importers have capped sharp gains for the rupee.

The rupee witnessed high volatility at the interbank foreign exchange market, opening at 94.77 against the US dollar and registering a fall of 28 paise over its previous close. In intraday trade, the USD/INR pair touched an intraday low of 94.90 and a high of 94.08 against the American currency.

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The rupee finally settled at 94.22 against the dollar, registering a rise of 27 paise over its previous close. This gain comes after the rupee appreciated 69 paise to close at 94.49 against the US dollar on Wednesday.

Market analysts expect the rupee to trade with a positive bias on improved global risk sentiments amid easing tensions between the US and Iran and softening of global crude oil prices. A decline in the US dollar may also support the rupee. However, dollar demand from importers and FII outflows may cap sharp gains.

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Dilip Parmar, Senior Research Analyst at HDFC Securities, stated that the rupee was bolstered by a rally in Asian peers, while the greenback's safe-haven appeal took a hit as softening crude prices eased inflationary concerns. Parmar also noted that the local currency found support through active short covering and healthy dollar inflows via domestic banks.

Meanwhile, the dollar index was trading at 97.86, down 0.16 per cent. Brent crude, the global oil benchmark, was trading lower by 2.23 per cent at USD 99.01 per barrel in futures trade. The domestic equity market declined, with Sensex falling 114 points to settle at 77,844.52, and the Nifty down 4.30 points to 24,326.65.

Foreign Institutional Investors offloaded equities worth Rs 340.89 crore on Thursday, according to exchange data. US President Donald Trump on Wednesday threatened Iran with more bombing if it doesn't reopen the Strait of Hormuz, amid a report that the warring sides were nearing an agreement to end the war.