Rupee rises 3 paise to 83.42 against US dollar in early trade

Mumbai, May 6 (PTI) The rupee appreciated 3 paise to 83.42 against the US dollar in early trade on Monday, supported by a firm trend in domestic equities.

Forex traders said the strength of the American currency in the overseas market and foreign fund outflows weighed on the local unit and restricted the up move.

At the interbank foreign exchange market, the local unit opened at 83.43 against the greenback. It later touched 83.42 in initial trade, registering a rise of 3 paise from its previous close.

On Friday, the rupee inched up 1 paisa to settle at 83.45 against the US dollar.

Indian rupee has not been able to make a dent against the dollar as FPIs and oil companies continue to buy US dollars and ensure it remains range bound, as RBI protects it from depreciation beyond 83.50, 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 at 105.16, higher by 0.13 per cent.

“The dollar was broadly steady as a soft US jobs report boosted traders that the US may still cut rates twice in 2024,” Bhansali said.

Brent crude futures, the global oil benchmark, rose 0.23 per cent to USD 83.15 per barrel.

On the domestic equity market front, the 30-share BSE Sensex climbed 434.04 points or 0.59 per cent to 74,312.19 in early trade. The NSE Nifty advanced 91.60 points or 0.41 per cent to 22,567.45 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth Rs 2,391.98 crore, according to exchange data.

Meanwhile, India’s forex reserves dropped USD 2.412 billion to USD 637.922 billion as on April 26, in the third consecutive weekly decline in the reserves, the Reserve Bank of India (RBI) said on Friday.

In the previous reporting week, the overall reserves had declined USD 2.28 billion to USD 640.33 billion.

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