The Indian rupee lost 5 paise against the US dollar, trading at 83.53 in early trade on Wednesday. This was due to the strong US dollar and high crude oil prices. The rupee remained within a narrow range against the US dollar as oil companies and Foreign Portfolio Investors (FPIs) increased their dollar purchases, impacting investor sentiment. However, the rupee found support from a stable domestic equity market.
Additionally, Brent crude futures, the global oil benchmark, rose by 0.55% to USD 86.71 per barrel
At the interbank foreign exchange market, the rupee opened at 83.51 and further declined to 83.53 against the dollar in initial deals, marking a 5 paise fall from its previous closing level. On the previous day, the rupee had depreciated 4 paise to settle at 83.48 against the US dollar.
According to Amit Pabari, MD of CR Forex Advisors, global factors such as the high value of the US DXY at around 105.50, the depreciation of the Yen and Yuan, and the increase in US bond yields have prevented the rupee from gaining significant strength and moving away from its multi-month low. He also added that the rupee is likely to trade within a range of 83.20 to 83.70 for the time being.
Meanwhile, the dollar index, which measures the US dollar against six major currencies, was trading at 105.71, down by 0.01%. This movement was following an increase in US treasury yields.
Additionally, Brent crude futures, the global oil benchmark, rose by 0.55% to USD 86.71 per barrel.