Rupee rises 8 paise to 83.89 against US dollar in early trade

Mumbai: Rupee appreciated 8 paise to 83.89 against US dollar in early trade on Friday, supported by a positive trend in domestic equities and a decline in the US dollar index. Forex traders said post the Reserve Bank of India's monetary policy announcement, markets now await for US CPI data, India CPI, WPI and IIP data and India's trade data all scheduled to be released next week.

The Jackson Holes Symposium to be held after next week will also remain in focus, traders said.

At the interbank foreign exchange, the rupee opened at 83.95 against the greenback, then touched 83.89, registering a rise of 8 paise over its previous closing price.

On Thursday, the rupee consolidated in a narrow range and settled for the day lower by 2 paise at 83.97 against US dollar.

Rupee was protected by the Reserve Bank of India (RBI) at 83.96 for this week and the local unit is likely to trade in a narrow range of 83.90/84.00 for the day after the RBI kept key benchmark rates on hold, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.03 per cent lower at 103.17.

Brent crude, the global oil benchmark, advanced 0.15 per cent to USD 79.28 per barrel.

"Brent oil prices rose to USD 79.22, a 3 per cent weekly gain, on rising Middle East tensions and better than expected US jobless claims data giving a better outlook on the US economy," Bhansali added.

Market analysts said while the rupee seems to be tilting towards a negative bias, but sharp fluctuations are not anticipated.

Meanwhile, the Monetary Policy Committee (MPC) of the Reserve Bank kept the benchmark repurchase or repo rate unchanged at 6.50 per cent.

Announcing the bi-monthly monetary policy review RBI Governor Shaktikanta Das said Indian rupee remained largely range-bound so far this financial year.

Das further noted that the country's forex reserves touched a record high of USD 675 billion as on August 2.

On the domestic equity market front, Sensex surged 958.63 points, or 1.22 per cent, to 79,844.85 points. The Nifty advanced 280.70 points, or 1.16 per cent, to 24,397.70 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday as they offloaded shares worth Rs 2,626.73 crore, according to exchange data.