Mumbai, Jun 26 (PTI) The rupee rose 41 paise to 85.67 (provisional) against the US dollar on Thursday on the back of a sharp drop in the greenback and a strong show in the domestic equity markets amid rise in risk appetite.
The rupee extended its gains supported by a rise in risk appetite in global markets after the announcement of a ceasefire between Iran and Israel, forex traders said.
Domestic markets rose by around a per cent each, while the US Dollar fell towards the 97 mark. Moreover, the broad decline in crude oil prices too favoured the domestic currency.
At the interbank foreign exchange, the rupee opened at 85.91 against the US dollar and traded in the range of 85.63-85.93 before settling at 85.67 (provisional), up 41 paise from its previous close.
On Wednesday, the rupee settled lower by 3 paise at 86.08 against the US dollar.
“Rupee gained… buoyed by a sharp drop in the dollar index. With global risk sentiment improving and the potential for continued fund inflows, the rupee may head towards 85.25 in the coming days,” Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities, said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.52 per cent down at 97.10 after strengthening in the previous session.
Brent crude, the global oil benchmark, went up marginally by 0.25 per cent to USD 67.85 per barrel in futures trade.
“We expect the rupee to extend its gains amid a rise in risk appetite in global markets after the announcement of a ceasefire between Iran and Israel,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.
Choudhary further said that weak US Dollar, falling crude oil prices and rising global markets may also support the rupee at lower levels.
“However, any selling by FIIs and any violation of the ceasefire may pressurise the rupee at lower levels. Traders may take cues from weekly unemployment claims, durable goods orders and pending home sales data from the US. USDINR spot price is expected to trade in a range of 85.30 to 86,” Choudhary said.
Meanwhile, in the domestic equity market, Sensex jumped 1,000.36 points to settle at 83,755.87, while Nifty rose 304.25 points to 25,549.
Foreign institutional investors (FIIs) offloaded equities worth Rs 2,427.74 crore on a net basis on Wednesday, according to exchange data.
