Mumbai: Supported by positive domestic equity markets, a weakened US dollar, and decreased crude oil prices, the Indian rupee strengthened for the second consecutive session, closing 8 paise higher at 83.79 (provisional) compared to the American currency on Tuesday. According to forex traders, a strong increase in the local currency was prevented by foreign fund outflows.
The rupee started at 83.86 against the dollar at the interbank forex market and fluctuated between 83.76 and 83.88. The currency ended at 83.79 (provisional) against the dollar, showing an increase of 8 paise compared to its last closing rate. The rupee finished Monday at 83.87 against the American currency, gaining 8 paise.
Research Analyst at Sharekhan by BNP Paribas, Anuj Choudhary mentioned that the Indian rupee reached its peak in almost two and a half weeks due to a declining US dollar and favorable local markets.
The rupee was also backed by a decrease in crude oil prices. Nevertheless, sharp gains were limited by outflows from Foreign Institutional Investors (FIIs). At the same time, the dollar index, a measure of the dollar's value compared to six other currencies, was down 0.04 percent at 101.68.
Experts noted that the US dollar dropped to its lowest level in seven months due to increasing likelihood of a rate reduction by the Federal Reserve. Choudhary mentioned that the USD-INR spot price is anticipated to fluctuate between Rs 83.50 and Rs 84, with investors keeping an eye on upcoming US PMI data and Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium. Brent crude, the worldwide oil standard, dropped by 0.31 percent to reach USD 77.42 per barrel.
Sensex witnessed an increase of 378.18 points, equivalent to 0.47 percent, reaching 80,802.86 points in the domestic equity market. The Nifty went up by 126.20 points, representing a 0.51 pc increase, to reach 24,698.85 points.
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