Rupee rises 6 paise to close at 83.13 against US dollar

Fed Chair, Jerome Powell stuck to his previous forecast of three rate cuts in 2024.

The rupee appreciated 6 paise to close at 83.13 (provisional) against the US dollar on Thursday, supported by a firm trend in domestic equities and a weak greenback amid rising appetite for riskier assets.

At the interbank foreign exchange market, the local unit opened at 83.07 against the greenback. The unit hit an intra-day high of 83.04 and a low of 83.16. The local unit finally settled at 83.13 (provisional) against the dollar, higher by 6 paise from its previous close of 83.19. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.15 per cent higher at 103.54.

Though the US dollar is trading on a higher note, it has retreated from its elevated level of 104 after the Federal Open Market Committee (FOMC) kept interest rates unchanged in the range of 5.25-5.5 per cent range. Fed Chair, Jerome Powell stuck to his previous forecast of three rate cuts in 2024. He revised growth projections for 2024 to 2.1 per cent from 1.8 per cent earlier. This led to a sharp rally in global risk assets, said Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas. Brent crude futures, the global oil benchmark, fell 0.20 per cent to USD 85.78 per barrel.

"We expect the rupee to gain slightly on the rise in global risk sentiments and weakness in the US dollar. However, firm crude oil prices may cap sharp gains," Choudhary said. He further noted that traders may take cues from PMI, weekly unemployment claims, current account and existing home sales data from the US. "Market participants may also look forward to the Bank of England’s Monetary Policy decision. BoE is expected to keep rates unchanged but investors will watch out for the governor’s speech for further guidance on its rate cut expectations," Choudhary added.

On the domestic equity market front, Sensex advanced 539.50 points, or 0.75 per cent, to close at 72,641.19 points. The Nifty rose 172.85 points, or 0.79 per cent, to settle at 22,011.95 points. Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth Rs 2,599.19 crore, according to exchange data.