The Indian rupee strengthened 12 paise to 94.72 against the US dollar in early trade, supported by a weaker American currency, positive domestic equity markets and fresh foreign fund inflows.
Mumbai, November 3 — The Indian rupee appreciated 12 paise to 94.72 against the US dollar in early trade on Tuesday, supported by positive domestic equities and weakness in the American currency.
At the interbank foreign exchange market, the rupee opened stronger against the dollar and gained further ground during early trading.
The improvement in the domestic currency came as the US dollar index weakened, providing support to emerging-market currencies, including the rupee.
Positive sentiment in Indian equity markets also helped the domestic currency.
The Sensex gained more than 600 points in early trade, while the Nifty also moved higher, reflecting improved investor sentiment.
Fresh buying by foreign institutional investors provided another positive trigger for the rupee. Foreign investors had purchased Indian equities worth more than ₹3,100 crore in the previous trading session.
Movement in international crude oil prices also remained an important factor for the currency market.
India imports a significant portion of its crude oil requirements, making the rupee sensitive to changes in global energy prices. Higher crude prices generally increase India’s import bill and demand for US dollars, putting pressure on the domestic currency.
Forex traders are closely monitoring developments in global markets, particularly geopolitical tensions in West Asia and their impact on crude oil prices.
Investors are also tracking movements in the US dollar and Treasury yields for further cues on the direction of emerging-market currencies.
The rupee’s movement in the coming sessions is expected to remain influenced by foreign fund flows, crude oil prices, domestic equity-market performance and global risk sentiment.
Any sustained increase in foreign portfolio investment could provide additional support to the Indian currency, while renewed strength in the US dollar or a sharp rise in crude oil prices could limit gains.
The 12-paise appreciation to 94.72 against the dollar provided some relief to the domestic currency after recent volatility in the foreign exchange market.
