The Indian rupee strengthened against the US dollar, driven by positive domestic factors like rising equity markets and easing crude prices. Experts predict slight negative bias in the short term.
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Mumbai, Jan 10 (PTI) Rising for the sixth straight session, the rupee jumped 10 paise to 83.03 against the US dollar on Wednesday, tracking a firm trend in equity markets and easing crude prices.
A weak greenback overseas and expectations of favourable global and domestic macroeconomic data also boosted the domestic currency, forex traders said.
At the interbank foreign exchange market, the local unit opened at 83.13 and traded between the peak of 82.97 and the lowest level of 83.18 against the greenback during the session.
It finally settled at 83.03 against the dollar, registering a gain of 10 paise from its previous close.
The domestic currency settled 1 paisa higher at 83.13 on Tuesday.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the Indian rupee appreciated following recovery in the domestic markets and a soft US dollar. A slight decline in crude oil prices also supported the rupee.
He said the investor sentiment was boosted after the World Bank retained India's growth rate projection at 6.3 per cent for FY24 and 6.4 per cent for the next fiscal.
The rupee is likely to trade with a slight negative bias on risk aversion in the global markets amid the global economic slowdown and the ongoing geopolitical tensions in the Red Sea and Middle East. Also, investors may remain cautious ahead of inflation data from India and the US.
"USD-INR spot price is expected to trade in a range of Rs 82.70 to Rs 83.40," Choudhary added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.16 per cent lower at 102.11 on Wednesday.
Brent crude futures, the global oil benchmark, declined 0.67 per cent to USD 77.07 per barrel.
On the domestic equity market front, Sensex rose 271.50 points, or 0.38 per cent, to settle at 71,657.71 points. The Nifty advanced 73.85 points, or 0.34 per cent, to 21,618.70 points.
Jateen Trivedi, VP Research Analyst, LKP Securities, said the rupee gained as buyers became "more assertive within the range-bound movements".
"The overall trend remains sideways, and rupee movements are influenced by range-bound volatility. The upcoming US CPI data, scheduled for tomorrow evening, is expected to play a crucial role in determining the trend of the US dollar, with potential effects on the rupee as well," Trivedi added.
Foreign institutional investors (FIIs) sold shares worth Rs 1,721.35 crore on Wednesday, according to exchange data.
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