Rupee inches 2 paise higher to close at 72.91 against US dollar

Representative image

The rupee edged higher by 2 paise to settle at 72.91 (provisional) against the American currency on Wednesday, tracking the trend in the US bond yields.

At the interbank forex market, the local unit opened at 72.97 against the greenback, and witnessed an intra-day high of 72.88 and a low of 73.10.

It finally ended at 72.91 against the American currency, registering a rise of 2 paise over its previous close.

On Tuesday, the rupee had settled 32 paise higher at 72.93 against the American currency.

"This week USD/INR spot is trading sideways between 72.75-73.30 tracking the trend in US bond yields. Now, the attention turns to the release of US inflation figures for February due tonight, which will ultimately dictate the path forward for bond prices ahead of next week’s FOMC monetary policy meeting,” said Rahul Gupta, Head Of Research-Currency, Emkay Global Financial Services.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.07 per cent to 92.02, ahead of the inflation data this Wednesday.

"The market expects US inflation to remain elevated compared to January figure and this may add further uptrend in US yields and dollar index,” Gupta said.

He further noted that in USD/INR spot, "we expect 72.70-72.75 to act as a crucial support, a break of which can push prices towards 72.50 zone, while 73.25 will act as an immediate resistance”.

Meanwhile, global oil benchmark Brent crude futures fell 0.30 percent to $67.32 per barrel.

On the domestic equity market front, the BSE Sensex ended 254.03 points or 0.50 percent higher at 51,279.51, while the broader NSE Nifty advanced 76.40 points or 0.51 percent to 15,174.80.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,801.87 crore on Tuesday, according to exchange data.