Mumbai rupee appreciated by 12 paise to settle at 83.45 against the US dollar on Thursday, supported by a positive trend in the stock markets and foreign capital inflow amid a favorable domestic macroeconomic profile.
Forex traders said the strength of the US currency in the overseas market and demand for US dollars from oil trading companies capped strong gains for the local unit.
In the interbank foreign exchange market, the local unit opened at 83.56 and reached an intraday high of 83.43 against the dollar during the session.
It finally settled at 83.45 against the dollar, registering a gain of 12 paise over its previous close.
On Wednesday, the rupee depreciated by 14 paise against the US dollar and settled at 83.57.
The Indian rupee appreciated on bond-related foreign inflows ahead of its inclusion in JP Morgan's debt index, said Anuj Choudhary, research analyst at BNP Paribas' Sharekhan.
Domestic markets hit new all-time highs and the Nifty crossed the 24,000 mark for the first time, supporting the domestic currency.
However, strong demand for US dollars from oil trading companies limited the strong gains.
"We expect the rupee to trade with a slight negative bias due to the strength of the US dollar and a rise in crude oil prices. Demand for dollars by OMCs and importers to meet their obligations towards the end of the month may also weigh on the rupee." Choudhary said, adding that fresh foreign inflows and positive tone in domestic equities can support the rupee.
Hitesh Jain, research strategist at YES Securities India Ltd, said despite the strengthening of the dollar against the yen and other emerging market currencies, the rupee continued to hold firm due to favorable macroeconomic profile and foreign capital inflows into Indian debt. .
"...The RBI wants the internal exchange rate to be determined by the market, so any strength in the INR will be contained so that it does not get too out of sync with its emerging market peers, he said, adding that RBI strategists currencies are "praising the INR. as an attractive currency for carry trades," as it has "relatively high yield and low volatility compared to its regional peers."
Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 105.90, down 0.14 percent.
Brent crude futures, the global oil benchmark, rose 0.56 percent to $85.73 a barrel.
At the domestic stock market, the 30-share BSE Sensex rose 568.93 points, or 0.72 per cent, to close at an all-time high of 79,243.18 points. The broader NSE Nifty closed 175.70 points, or 0.74 per cent, higher at its new high of 24,044.50 points.
Foreign institutional investors (FIIs) were net buyers in the capital markets on Thursday as they bought shares worth Rs 7,658.77 crore, according to exchange data.
Forex traders said the strength of the US currency in the overseas market and demand for US dollars from oil trading companies capped strong gains for the local unit.
In the interbank foreign exchange market, the local unit opened at 83.56 and reached an intraday high of 83.43 against the dollar during the session.
It finally settled at 83.45 against the dollar, registering a gain of 12 paise over its previous close.
On Wednesday, the rupee depreciated by 14 paise against the US dollar and settled at 83.57.
The Indian rupee appreciated on bond-related foreign inflows ahead of its inclusion in JP Morgan's debt index, said Anuj Choudhary, research analyst at BNP Paribas' Sharekhan.
Domestic markets hit new all-time highs and the Nifty crossed the 24,000 mark for the first time, supporting the domestic currency.
However, strong demand for US dollars from oil trading companies limited the strong gains.
"We expect the rupee to trade with a slight negative bias due to the strength of the US dollar and a rise in crude oil prices. Demand for dollars by OMCs and importers to meet their obligations towards the end of the month may also weigh on the rupee." Choudhary said, adding that fresh foreign inflows and positive tone in domestic equities can support the rupee.
Hitesh Jain, research strategist at YES Securities India Ltd, said despite the strengthening of the dollar against the yen and other emerging market currencies, the rupee continued to hold firm due to favorable macroeconomic profile and foreign capital inflows into Indian debt. .
"...The RBI wants the internal exchange rate to be determined by the market, so any strength in the INR will be contained so that it does not get too out of sync with its emerging market peers, he said, adding that RBI strategists currencies are "praising the INR. as an attractive currency for carry trades," as it has "relatively high yield and low volatility compared to its regional peers."
Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 105.90, down 0.14 percent.
Brent crude futures, the global oil benchmark, rose 0.56 percent to $85.73 a barrel.
At the domestic stock market, the 30-share BSE Sensex rose 568.93 points, or 0.72 per cent, to close at an all-time high of 79,243.18 points. The broader NSE Nifty closed 175.70 points, or 0.74 per cent, higher at its new high of 24,044.50 points.
Foreign institutional investors (FIIs) were net buyers in the capital markets on Thursday as they bought shares worth Rs 7,658.77 crore, according to exchange data.
