Indian Rupee Makes Gains Against the US Dollar Amidst Weak Dollar and Persistent Foreign Investment

The Indian rupee demonstrated resilience as it appreciated by 9 paise to reach a value of 82.74 against the US dollar during Thursday's early trading sessions. This sturdy performance was driven by a weakening of the US dollar in international markets coupled with a continuous stream of foreign funds entering India's capital markets.

Dollar's Weakness Bolsters Rupee

Forex traders observed that the inconsistent performance of the US dollar overseas provided a fertile ground for the rupee's advancement. Adding to the buoyancy were the positive undertones in the local equity market that encouraged the rupee's firmness against the dollar.

Factors Affecting the Rupee's Trajectory

While the rupee enjoyed upward momentum, fluctuating crude oil prices played a role in grounding its potential surge. Nevertheless, the Indian currency managed to start strong at 82.82 and nudged up to 82.74 against the dollar, improving from its previous closing position.

The preceding day saw the rupee finishing 7 paise ahead at 82.83 against the US dollar. This was attributed, in part, to the dollar index dipping by 0.07 per cent to 103.24, following the US payroll data that revealed a lower-than-anticipated job growth rate for February.

Federal Reserve Chairman Jerome Powell's hints at a dovish stance in upcoming monetary policies further influenced the dollar's dip, which analysts pinpointed as a contributing factor to the rupee's performance.

In contrast, Brent crude futures saw a marginal decrease of 0.13 per cent, landing at $82.85 per barrel, directly influencing energy-dependent economies and currencies.

Reflecting the positive sentiment, the benchmark BSE Sensex climbed by 58.49 points, while the broader NSE Nifty saw an increase of 17 points, showcasing the general market confidence.

Further underpinning the rupee's strength were the activities of foreign institutional investors (FIIs), who were net purchasers in the capital markets, having acquired shares amounting to a significant ₹2,766.75 crore.

Rupee, Dollar, Forex