Rupee rises five paise to close at 83.03 against U.S. dollar

The Rupee appreciated five paise to close at 83.03 (provisional) against the U.S. dollar on February 14, tracking positive domestic equities.

Forex traders said strength of the American currency in the overseas market and elevated crude oil prices weighed on the local unit and restricted a sharp uptick.

At the interbank foreign exchange, the local unit opened at 83.11 against the greenback. It hit an intra-day high of 83.02 and a low of 83.12. It finally settled at 83.03 (provisional) against the dollar, higher by five paise from its previous close of 83.08.

“We expect the Rupee to trade with a slight negative bias on strong U.S. dollar and risk aversion in global markets. Rising crude oil prices may also put pressure on the Rupee,” said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas.

Mr. Choudhary added that any bounce back in domestic markets may support the Rupee at lower levels. “Traders may remain cautious ahead of India’s trade balance and the U.S. retail sales data. USD-INR spot price is expected to trade in a range of ₹82.80-83.40,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04% lower at 104.92. “U.S. Dollar bounced back on hotter-than-expected inflation. U.S. CPI rose 3.1% year-over-year in January 2024 vs forecast of 2.9%. Core CPI rose 3.9% year-over-year vs forecast of 3.7%. This led to a decline in expectations of a rate cut by the Federal Reserve in March and May 2024,” Mr. Choudhary said.

Brent crude futures, the global oil benchmark, rose 0.16% to $82.90 per barrel. On the domestic macroeconomic front, the wholesale price index (WPI)-based inflation eased to a three-month low of 0.27% in January, mainly due to moderation of food prices, including vegetables.

On the domestic equity market front, the Sensex advanced 267.64 points, or 0.37% to 71,822.83. The Nifty rose 96.80 points or 0.45% to 21,840.05.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday as they purchased shares worth ₹376.32 crore, according to exchange data.