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Rupee rises 7 paise to 84.22 against US dollar in early trade

Nov 26, 2024, 10:03 IST
PTI
Representational imageiStock
Rupee appreciated 7 paise to 84.22 against the US dollar in morning trade on Tuesday, on a sharp rebound in domestic equities amid improved investor risk appetite. Forex traders said the MSCI equity index rebalancing significantly boosted sentiment for Indian equity markets as foreign institutional investors broke a 40-session streak of net selling by purchasing Rs 9,947 crores on Monday, lending robust support to the rupee.
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Moreover, the win by the incumbent government in Maharashtra, further fueled investor confidence in economic stability, sparking a rally in equity markets.

At the interbank foreign exchange, the rupee opened at 84.27 and moved in a tight range and touched an early high of 84.22 against the greenback, registering a gain of 7 paise over its previous close.

On Monday, the rupee appreciated 12 paise to close at 84.29 against US dollar.

"While Donald Trump's aggressive trade policies loom large, the rupee's outlook remains cautiously optimistic. The Reserve Bank of India's projection of a GDP growth rebound to 7.6 per cent in Q3 has infused fresh confidence in India's economic trajectory. Additionally, a surge in capital inflows is likely to provide robust support," CR Forex Advisors MD Amit Pabari said.

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Pabari further said that the RBI's vigilant stance will be critical in managing volatility, with interventions likely at key levels to maintain stability.

"Given the factors, the USDINR pair appears to face resistance around the 84.50 level, with expectations of trading within a range of 83.80 to 84.50, leaning toward a downside bias," he said.

On the global front, US Treasury Secretary nominee Scott Bessent's fiscal deficit reduction agenda capped US Treasury yields, Pabari said. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.28 per cent at 107.11.

Brent crude, the global oil benchmark, rose by 0.33 per cent to USD 73.25 per barrel in futures trade.

In the domestic equity market, the 30-share equity benchmark Sensex jumped 167.76 points or 0.21 per cent to 80,277.61 points in early trade, while Nifty jumped 55.80 points or 0.23 per cent to 24,277.70 points.

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Foreign Institutional Investors (FIIs) turned net buyers in the capital markets on Monday, purchasing shares worth Rs 9,947.55 crore, according to exchange data.

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