Thanks to positive trend in domestic equities, Indian rupee rises to 83.49 against US dollar in early trade

The rupee traded in a narrow range and appreciated 2 paise to 83.49 against the US dollar in early trade on Thursday, as a positive trend in domestic equities supported the local unit, while elevated crude oil prices weighed on investor sentiments. At the interbank foreign exchange market, the local unit opened at 83.49, registering a rise of 2 paise from its previous close.

On Wednesday, the rupee stayed range-bound and settled 2 paise lower at 83.51 against the US dollar.

"Persistent demand for the dollar from local importers has capped the rupee's potential gains, yet its outlook remains optimistic, buoyed by recent positive economic indicators," CR Forex Advisors MD-Amit Pabari said.

Pabari further said the rupee's outlook is supported by strong foreign inflows, a positive economic forecast, and India's impressive macroeconomic growth, currently the fastest among large economies.

The Reserve Bank of India (RBI) appears determined to prevent the rupee from depreciating below 83.70, despite pressure from oil companies due to elevated oil prices, he added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 104.93, lower by 0.11 per cent.

Brent crude futures, the global oil benchmark, advanced 0.76 per cent to USD 85.73 per barrel.

On the domestic equity market front, the 30-share BSE Sensex rose 105.32 points, or 0.13 per cent, to 80,030.09 points. The broader NSE Nifty advanced 21.60 points, or 0.09 per cent, to 24,346.05 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, as they purchased shares worth Rs 583.96 crore, according to exchange data.