Rupee rises 7 paise to 95.19 against US dollar in early trade
IANSAccording to forex traders, sustained inflows and an easing of the oil import burden would provide a stronger foundation for rupee appreciation. The immediate operating range for USDINR is 94.75-95.75.
At the interbank foreign exchange market, the rupee opened at 95.21, then gained ground and touched 95.19 against the US dollar, registering a rise of 7 paise over its previous close.
On Thursday, the rupee consolidated in a narrow range and ended 2 paise higher at 95.26 against the US dollar.
"The Indian rupee opened flat to positive on weak dollar and softening of US treasury yields. However, weak Asian markets and a surge in crude oil prices capped sharp gains. ECB and Bank of Japan kept interest rates unchanged," said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.75, lower by 0.27 per cent.
Brent crude, the global oil benchmark, was trading lower by 1.05 per cent at USD 116.09 per barrel in futures trade.
"We expect the RBI's presence to remain important in keeping currency moves orderly," said Anindya Banerjee, Head of Commodity and Currency Research, Kotak NEO.
The next major triggers are developments in West Asia, Tuesday's US midterm elections and the inflation and employment data that will shape December policy decisions, Banerjee said.
On the domestic equity market front, Sensex rose 138.77 points to 74,289.81 in early trade, while Nifty advanced 38.95 points to 22,967.10.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 943.60 crore on a net basis on Thursday, according to exchange data.
Meanwhile, the IMF on Thursday said exchange rate flexibility should be the preferable policy response to help the Indian economy adjust to energy shocks, amid reports that the RBI resorted to massive market intervention to prop up the rupee.
"Our view is that the rupee should be the first line of defence in the face of these shocks. So, allowing the exchange rate to move freely to reflect the impact of these shocks is important to help the Indian economy adjust to the shocks," IMF Communications Director Julie Kozack has said.