The Indian rupee eked out a marginal 4 paise gain at 75.05 against the US dollar in morning trade on Friday, tracking positive opening in domestic equity markets.
However, strong American currency and elevated crude oil price level restricted the rupee’s further recovery.
Forex traders said geopolitical tensions, sustained foreign fund outflows and hawkish US Fed stance dragged down the local unit, while positive domestic equities supported the local unit in opening deals.
At the interbank foreign exchange, the rupee opened at 75.12 against the US dollar and slipped further to 75.13, before staging a mild recovery to trade at 75.05, clocking a gain of 4 paise.
On Thursday, the rupee had settled at 75.09 against the US dollar. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.08 per cent to 97.17.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell by 0.08 per cent to 97.17. Weak Asian and emerging market peers, along with strong crude oil prices will weigh on sentiments.
However, exporters may look to hedge their exposures and IPO flows may trickle in capping the depreciation bias of the domestic unit, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
The Reserve Bank of India’s presence also could not be ruled out to curb volatility in the market, Iyer added. Meanwhile, global oil benchmark Brent crude futures jumped by 0.50 per cent to USD 89.79 per barrel.
On the domestic equity market front, the 30-share Sensex was trading more than 691.43 points or 1.21 per cent higher at 57,968.37, while the broader NSE Nifty advanced by 235.65 points or 1.38 per cent to 17,345.80.
Foreign institutional investors remained net sellers in the capital market on Thursday, as they offloaded shares worth Rs 6,266.75 crore, as per stock exchange data.
Source:moneycontrol.com