The Indian rupee strengthened for the fourth consecutive trading session, appreciating by 12 paise to close at 86.44 (provisional) against the US dollar on Wednesday. This rise was primarily driven by positive momentum in domestic equity markets and a decline in global crude oil prices.
However, the rupee’s gains were moderated by a strengthening US dollar against other major currencies, particularly as markets awaited the US Federal Reserve’s interest rate decision.
Key Factors Influencing the Rupee:
- Domestic Equity Market: The BSE Sensex and Nifty indices both recorded gains, contributing to the rupee’s appreciation.
- Crude Oil Prices: A decrease in global crude oil prices, with Brent crude falling to USD 70.02 per barrel, provided further support.
- Foreign Institutional Investor (FII) Activity: FIIs were net buyers of Indian equities, purchasing shares worth Rs 694.57 crore on Tuesday.
- US Dollar Strength: The US dollar index rose by 0.36% to 103.26, reflecting a strengthening dollar against other major currencies.
- Federal Reserve Decision: Market participants remained cautious ahead of the Federal Open Market Committee (FOMC) meeting, where the Fed was expected to maintain current interest rates.
Market Outlook:
Analysts anticipate the rupee to maintain a positive bias, influenced by positive domestic market trends and continued FII inflows. The projected trading range for the USD-INR spot price is between Rs 86.20 and Rs 86.80.
