Rupee rises 13 paise to close at 95.81 against US dollar

Mumbai: The rupee appreciated 13 paise to close at 95.81 (provisional) against the US dollar on Wednesday as crude oil prices retreated from their elevated levels and tracking an overnight decline in the US Dollar index.

Forex traders said easing US Treasury yields from multi-decade highs also supported the rupee. However, weak domestic markets capped sharp gains for the domestic unit.

At the interbank foreign exchange market, the rupee opened at 95.87, then lost ground and touched an intraday low of 95.98 against the American currency. At the end of Wednesday's trading session, the domestic unit was quoted at 95.81 (provisional) against the greenback, higher by 13 paise over its previous close.

Rupee trades in narrow range against US dollar in early trade

On Tuesday, the rupee settled marginally higher at 95.94, just a tad over the psychologically important 96 per dollar level.

"We expect the rupee to trade with a negative bias on uncertainty over the US-Iran deal and risk aversion in global markets. Concerns over a strong Dollar and elevated US treasury yields may also pressurise the rupee," said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

Choudhary further noted that "hopes that US and Iran officials are expected to talk through mediators may support the rupee at lower levels. Traders may take cues from ADP non-farm employment, core PCE price index and final GDP data from the US."

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.23, lower by 0.14 per cent.

Brent crude, the global oil benchmark, was trading higher by 0.58 per cent at USD 103.18 per barrel in futures trade, its lowest level in over 10 days.

According to traders, the rupee is trading in a narrow range as Dollar sales by state-run banks on behalf of the Reserve Bank of India in both spot and forward markets are keeping the USD/INR pair under the 96.00 level.

Additionally, foreign portfolio outflows of around $2.2 billion this month and firm US yields are keeping the pressure on the USD/INR pair.

On the domestic equity market front, Sensex dipped 48.78 points to settle at 72,480.29, while the Nifty was down 95.75 points at 22,620.45.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 9,980.22 crore on a net basis on Tuesday, according to exchange data.