The rupee appreciated 38 paise to close at 76.62 against the US dollar on Wednesday following a retreat in crude oil prices and rebound in domestic equities.
At the interbank forex market, the local unit opened at 76.90 against the greenback and witnessed an intra-day high of 76.53 and a low of 76.92.
The rupee closed at 76.62 against the American currency, registering a rise of 38 paise over its previous close.
On Tuesday, the rupee fell 7 paise to close at a lifetime low of 77 against the US dollar, weighed by surging crude oil prices.
Rupee appreciated following a rebound in risk assets and expectations of inflows in bond markets as global fund houses exclude the Russian debt from bond indices, said Dilip Parmar, Research Analyst, HDFC Securities.
Equities seem supported ahead of a meeting between Ukraine and Russian foreign ministers in Turkey tomorrow in which some kind of ceasefire can emerge in Ukraine, Parmar added.
“Rupee bears seem to be taking rest before pushing towards 77.60. In the near term, we are expecting consolidation in the range of 76.40 to 76.90,” he noted.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee appreciated against the US Dollar on broad dollar declines and local equities extended Tuesday’s rebound.
Meanwhile, tensions also eased in Eastern Europe after media reports showed that Ukraine President Volodymyr Zelensky said that Ukraine is no longer pressing for NATO membership and it is also open to a compromise on the status of two breakaway pro-Russian territories that President Vladimir Putin had recognised as independent.
The dollar index, which measures the greenback’s strength against a basket of six currencies, fell 0.40 per cent to 98.66.
Regional currencies were also appreciated on Wednesday. Crude oil prices pulled back despite US ban of Russian imports of energy products and lent support.
“A strong rebound in equity markets, followed by cool-off in oil prices helped the Rupee strengthen. However, volatility is here to stay as crude oil prices remain elevated. We expect a broad range of 76.20 to 77.00 on spot,” said Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd.
Brent crude futures, the global oil benchmark, were trading 1.88 per cent lower at USD 125.57 per barrel.
On the domestic equity market front, the BSE Sensex ended 1,223.24 points or 2.29 per cent higher at 54,647.33, while the broader NSE Nifty surged 331.90 points or 2.07 per cent to 16,345.35.
According to Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, the rupee fell in the first half of the session but rose in the latter half following comments from the Russian foreign ministry that it would be better if their goals were met through talks.
“Market participants also remain cautious ahead of the important ECB policy statement that will be released on Thursday. Today, volatility could remain low as no major economic data is expected to be released from the US,” Somaiya said.
Foreign institutional investors remained net sellers in the capital market on Tuesday as they offloaded shares worth Rs 8,142.60 crore, as per stock exchange data.
