New Delhi, The rupee on Thursday recovered from early losses to close 31 paise higher at 85.31 (provisional) following a weakening of the dollar against major currencies overseas and a fall in US Treasury yields.
Forex traders said the dollar declined due to weaker-than-expected ADP non-farm employment data from the US.
They said a fall in global crude oil prices also supported the local currency.
The domestic currency opened at 85.69 against the US currency at the interbank foreign exchange market and touched an intra-day high of 85.19 and a low of 85.70 during the session.
The local currency finally closed at 85.31 (provisional), up 31 paise from its previous close.
On Wednesday, the rupee closed 3 paise lower at 85.62 against the US dollar.
“The Indian rupee rose sharply on Friday on the back of a weakening US dollar and a drop in US Treasury yields. A drop in crude oil prices also supported the rupee. However, weak domestic markets prevented sharp gains,” said Anuj Chowdhary, research analyst at Mirae Asset Sharekhan.
The dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.05 per cent to 96.82.
Global oil benchmark Brent crude futures fell 1.01 per cent to $68.41 per barrel in mid-trade.
“We expect the rupee to strengthen on a weaker US dollar and rising risk-taking sentiment in global markets. Overall, weakness in crude oil could also support the domestic currency. However, uncertainty over trade tariffs could prevent sharp gains,” Chowdhary said.
Going forward, traders can take cues from the non-farm payrolls report from the US. “USD/INR spot price is expected to trade in the range of 84.90 to 85.60,” Chowdhary said. Meanwhile, in the domestic equity market, the Sensex fell 170.22 points or 0.20 per cent to 83,239.47, while the Nifty declined 48.10 points or 0.19 per cent to 25,405.30. Foreign institutional investors (FIIs) sold shares worth Rs 1,561.62 crore on a net basis on Wednesday, according to exchange data.
