Rupee rises 18 paise against US dollar

The rupee gained 18 paise to settle at 82.25 against the US dollar on Tuesday, as a weak greenback overseas and strong macroeconomic data supported investor sentiments.

At the interbank foreign exchange market, the local unit opened at 82.42 against the US dollar and settled at 82.25, up 18 paise over its previous close.

During the day, the domestic unit witnessed an intra-day high of 82.25 and a low of 82.47.

On Monday, the rupee closed at 82.43 against the US currency.

''The rupee traded strongly above 82.35 as CPI headline inflation cooled in India, along with buying witnessed in capital markets supported the rupee altogether. The dollar index traded weak helping the rupee gain strength. All eyes are now focused on the US CPI and interest rate decision up ahead,'' Jateen Trivedi, VP Research Analyst at LKP Securities, said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.37 per cent to 103.27.

Meanwhile, global oil benchmark Brent crude futures advanced 1.53 per cent to USD 73 per barrel.

''The dollar fell against most of the Asian currencies before the release of US inflation numbers later in the evening. The fall in crude oil prices, risk-on sentiments and upbeat economic data supported the rupee in today’s trade,'' said Dilip Parmar, Research Analyst, at HDFC Securities.

Ahead of three major central banks' policy decisions, the risk sentiment remains on its front foot, with equities trading higher and the US Dollar mostly lower against major currencies, Parmar said.

''Spot USD/INR has support at 82.25, the 50 and 100 days simple moving average, and resistance at 82.70,'' Parmar added.

On the domestic equity market front, the 30-share BSE Sensex advanced 418.45 points or 0.67 per cent to end at 63,143.16 points, and the broader NSE Nifty rose 114.65 points or 0.62 per cent to 18,716.15 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Monday as they offloaded shares worth Rs 626.62 crore, according to exchange data.

On the domestic macroeconomic front, retail inflation declined to a 25-month low of 4.25 per cent in May, mainly on account of softening prices of food and fuel items.

India's industrial production growth rose to 4.2 per cent in April from 1.7 per cent in March 2023, mainly due to good performance by the manufacturing and mining sectors, according to official data released on Monday. ''Focus now shifts to the all-important FOMC policy statement that is scheduled to release tomorrow. Projection of inflation and growth will also be importantly watched and that could trigger volatility for the dollar.

''Today, the focus will be on the US inflation number and this will be important ahead of the Fed policy statement. We expect the USD/INR(Spot) to trade sideways and quote in the range of 82.20 and 82.80,'' Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)