MUMBAI, Jan 22: The rupee appreciated 25 paise to close at 86.33 (provisional) against the US dollar on Wednesday, supported by positive domestic equities and soft US dollar index.
Forex traders said the rupee is likely to witness high volatility with a negative bias ahead of key events in the global and domestic economic landscape.
Moreover, the overall uncertainty about the global economy continued to weigh on both currencies and commodities, keeping investors on edge.
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At the interbank foreign exchange, the rupee opened at 86.56 against the greenback. During the day, the local unit touched an intraday high of 86.30 and a low of 86.71.
It finally closed at 86.33 (provisional) against the US dollar, up 25 paise from its previous close.
On Tuesday, the rupee fell 13 paise to 86.58 against the US dollar.
“We expect the rupee to remain largely weak on underlying strength in the US dollar and overall weakness in the domestic markets. Importer demand for dollars may also pressurise the rupee. However, any extended sell-off in crude oil may support the rupee at lower levels,” Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan, said.
Choudhary further noted that markets may see some volatility on incoming statements and announcements by the Trump administration. “USD-INR spot price is expected to trade in a range of 86.20 to 86.65,” he added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading down 0.15 per cent to 107.89 as traders pondered over the Trump Tariff Plan.
Brent crude, the global oil benchmark, rose 0.48 per cent to USD 79.67 per barrel in futures trade.
Crude oil prices had fallen due to fears of tough US policies and had touched USD 78 per barrel, a 4 per cent decline from recent highs following President Trump’s mention of increasing US oil output.
In the domestic equity market, the 30-share BSE Sensex rose 566.63 points, or 0.75 per cent, to settle at 76,404.99 points, while the Nifty rose 130.70 points, or 0.57 per cent, to 23,155.35 points.
Foreign Institutional Investors (FIIs) remained net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 5,920.28 crore, according to exchange data. (PTI)
