Following the weakness of the U.S. dollar in the international market, the rupee nudged up 2 paise to close at 81.78 (provisional) against the U.S. dollar on Thursday. Significant inflows of foreign capital, according to forex traders, as well as crude oil prices trading below USD 75 per barrel, strengthened the local currency.
The local currency at the interbank foreign exchange market started off stronger against the U.S. dollar at 81.68 but later gave back part of those gains to conclude at 81.78 (provisional), gaining 2 paise from its previous level.
The rupee’s value against the dollar fluctuated throughout the session, reaching highs of 81.65 and lows of 81.84. The rupee’s closing value versus the U.S. dollar on Wednesday was 81.80. Brent crude futures, the global standard for crude oil, increased 0.98 percent to USD 73.04 per barrel.
The dollar index, which measures how strong the dollar is relative to a basket of six different currencies, decreased 0.04 percent to 101.30. Following its most recent 25 basis point increase in interest rates, the Federal Reserve hinted at a break in its year-long cycle of rate hikes, which caused the U.S. dollar to decline.
According to Jateen Trivedi, VP Research Analyst at LKP Securities, the rupee had a great start to the day versus the dollar but later gave up its gains as it dropped around 81.80.
“Rupee range can be seen between 81.50 and 82.00 after Fed’s desk hinted towards a dovish stance which can help the rupee going forward,” Trivedi said, adding that easing oil prices can also help the currency.