Rupee Rises Against US Dollar: Key Factors

Mumbai, Feb 18 (PTI) The rupee rose 5 paise to close at 90.67 (provisional) against the US dollar on Wednesday driven by inflow of foreign funds and positive domestic equity markets.

However, higher global crude oil prices and a strengthening greenback capped sharp gains in the local unit, forex traders said.

At the interbank foreign exchange, the rupee opened at 90.60 against the US dollar and traded in a narrow range of 90.60-90.71 before settling at 90.67 (provisional), higher by 5 paise against its previous close.

The rupee gained 2 paise to settle at 90.72 against the US dollar on Tuesday.

"The rupee remained range-bound with the dollar being protected by the RBI," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.


Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.08 per cent higher at 97.22.

"The dollar index was slightly higher, and analysts expect scope for a near-term rebound after a prolonged slump. Strong US growth and foreign investment interest supported the dollar," Bhansali added.

Brent crude, the global oil benchmark, was trading 0.22 per cent higher at USD 67.57 per barrel in futures trade.

On the domestic equity market front, Sensex jumped 283.29 points to settle at 83,734.25, while the Nifty advanced 93.95 points to 25,819.35.

On Tuesday, foreign institutional investors turned net buyers and purchased equities worth Rs 995.21 crore, according to exchange data.