Rupee Gains 7 Paise Against USD: Weak Dollar, Oil Drop Boost Local Currency

Rupee rises to 85.46 vs USD on weak dollar, lower oil prices & strong equities. FII outflows limit gains. Key range: 85.25-85.75.

Indian rupee strengthens against the US dollar amid global market shifts.

Source : Pexels

Rupee rose 7 paise to 85.46 against the US dollar in early trade on Thursday, supported by a weak American currency, a drop in global crude oil prices, and a positive opening in the domestic equity markets.

However, FII outflows capped further gains in the local unit, according to forex traders.

At the interbank foreign exchange, the rupee opened at 85.43 against the greenback before falling to 85.46, up 7 paise from its previous close. The rupee had settled at 85.53 against the US dollar on Wednesday.

"The rupee, which gained on Wednesday, opened higher as dollar index fell yesterday and was lower on Thursday, though Asian currencies were still range-bound. The range for the rupee is 85.25-75 as dips to the dollar get bought," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

"Importers may buy for short-term hedging near 85.25 while exporters need to wait for proper levels above 85.75 to hedge," he said.

Investors will watch out for CPI data later on Thursday, which could determine the range for the local unit, forex traders said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, dipped 0.07 per cent to 99.02.

"The dollar slided on Thursday on further signs that the US president may adopt a softer stance in tariff negotiations and heightened expectations of FED Reserve rate cuts after a softer CPI inflation data yesterday (Wednesday). Trump also said he is willing to extend the July 9 deadline for completing trade talks with countries before higher US tariffs are imposed," he said.

In the domestic equity market, the 30-share BSE Sensex rose 108.02 points to 82,623.16 in early trade, while Nifty was up 38.7 points to 25,180.10.

Brent crude, the global oil benchmark, dropped 0.09 per cent to USD 66.81 per barrel in the futures trade.

Foreign institutional investors (FIIs) offloaded equities worth Rs 446.31 crore on a net basis on Wednesday, according to exchange data. 

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)