Rupee rises 8 paise to close at 88.21 against US dollar
Forex traders said upbeat market sentiment, driven by trade deal optimism and easing crude oil prices, enthused investor sentiment, even as importer demand for dollars capped sharp gains.
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MUMBAI: The rupee appreciated eight paise to close at 88.21 (provisional) against the US dollar on Wednesday, on strong domestic markets and optimism over the trade deal between India and the US.
Forex traders said upbeat market sentiment, driven by trade deal optimism and easing crude oil prices, enthused investor sentiment, even as importer demand for dollars capped sharp gains.
Moreover, investors remain cautious ahead of the US FOMC meeting decision.
At the interbank foreign exchange market, the rupee opened at 88.21, and later traded in a range of 88.15 to 88.35 during the day. The local unit finally settled at 88.21 (provisional) against the greenback, registering a gain of 8 paise from its previous close.
On Tuesday, the rupee depreciated by 10 paise to close at 88.29 against the US dollar.
"We expect the rupee to trade with a slight positive bias on positive domestic markets and weak crude oil prices. Upbeat market sentiments over trade deal optimism may further support the rupee," said Anuj Choudhary, Research Analyst, Currency and Commodities, Mirae Asset ShareKhan.
US President Donald Trump has said, "I'm doing a trade deal with India."
However, month-end dollar demand from importers may cap sharp gains. Investors may remain cautious ahead of the US FOMC meeting decision. USDINR spot price is expected to trade in a range of 87.85 to 88.60, Choudhary added.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.21 per cent to 98.87.
Brent crude, the global oil benchmark, rose 0.22 per cent to USD 65.54 per barrel in futures trading.
On the domestic equity markets front, Sensex climbed 368.97 points to settle at 84,997.13, while Nifty gained 117.70 points to 26,053.90.
Foreign Institutional Investors purchased equities worth Rs 10,339.80 crore on Tuesday, according to exchange data.
Meanwhile, India's industrial production growth remained steady at 4 per cent in September this year, driven by the manufacturing sector's strong performance, buoyed by GST rationalisation and festive demand, according to official data released on Tuesday.
Factory output, measured by the Index of Industrial Production (IIP), expanded by 3.2 per cent in September 2024.