Mumbai: A strong trend in local equities and inflows of foreign funds helped the rupee strengthen 8 paise to 83.37 against the US dollar in early trade on Friday.
The strength of the US dollar in international trade and rising crude oil prices, according to forex traders, put pressure on the local currency and limited the appreciation bias.
The local unit opened at 83.42 on the interbank foreign currency market and gained ground to trade at 83.37 against the US dollar in early trades. This is an increase of 8 paise from its previous closing position.
The rupee gained 12 paise versus the US dollar on Thursday, closing at 83.45. Ahead of this evening's critical US inflation reading, the dollar index, which measures the strength of the US dollar against a basket of six currencies, was up 0.15 percent at 106.06.
The world oil benchmark, Brent crude futures, were up 0.47 percent at $86.80 a barrel as declining demand was countered by worries about supply interruptions from Russia and the Middle East due to ongoing conflict.
The rupee rose from Wednesday's closing level on Thursday due to strong inflows, according to Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP.
Since Friday is both the month- and quarter-end, inflows are anticipated as well, which might push the rupee higher to 83.35. Importers can purchase the dips while exporters hold off on selling," Bhansali continued.
The 30-share BSE Sensex increased 347.48 points, or 0.44 percent, to 79,590.66 points in the domestic equities market. The NSE Nifty as a whole increased by 114.55 points, or 14.55%, to 24,159.05 points. According to exchange data, Foreign Institutional Investors (FIIs) bought shares worth Rs 7,658.77 crore on Thursday, making them net purchasers in the capital markets.
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