Rupee rises 8 paise to 72.97 against U.S. dollar in early trade

Forex traders believe upside for the American currency could remain capped amid expectations that the U.S. interest rates will remain low.

The Indian rupee inched higher by 8 paise to 72.97 against the U.S. dollar in early trade on Wednesday amid a muted trend in the domestic equity market.

At the interbank foreign exchange, the domestic unit opened on a flat note at 73.02 against the dollar, then inched higher and touched 72.97, registering a rise of 8 paise over its previous close.

On Tuesday, the rupee had closed at 73.05 against the U.S. dollar.

“Markets would look to cues from the equity markets in the intra-day session, while the weakness of the greenback could cap losses of the local unit,” Reliance Securities said in a research note.

Markets would also await the Fed meeting minutes for further cues, the note added.

On the domestic equity market front, the 30-share BSE Sensex was trading 85.17 points or 0.17% lower at 50,108.16. Similarly, the broader NSE Nifty declined 19.05 points or 0.13% to 15,089.05.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.01% at 89.73, ahead of the minutes from the U.S. Federal Reserve’s most recent meeting due later in the day.

Forex traders believe upside for the American currency could remain capped amid expectations that the U.S. interest rates will remain low.

Foreign institutional investors (FIIs) were net buyers in the capital markets, as they purchased shares worth ₹618.49 crore on Tuesday, as per provisional data.

Brent crude futures, the global oil benchmark, were trading down 0.93% at $68.07 per barrel.

Meanwhile, India saw record 4,529 fatalities due to coronavirus in a single day pushing the COVID-19 death toll to 2,83,248, while 2,67,334 fresh infections were recorded taking the total tally of cases to 2,54,96,330, according to the Union Health Ministry data updated on Wednesday.

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