In early trading on Friday, the rupee strengthened 8 paise to 79.61 against the US dollar, following the dollar’s decline against its major peers and foreign fund inflows. The domestic unit began trading at 79.66 against the dollar on the interbank foreign exchange, touching 79.61 in early deals, gaining 8 paise from its previous close.
The rupee gained 26 paise on Thursday to settle at a week-high of 79.69 versus the dollar. As markets processed yet another hawkish Fed statement, the dollar index, which measures the strength of the dollar against a basket of six currencies, dropped 0.72 % to 108.92.
Jerome Powell, the chairman of the US Federal Reserve, declared on Thursday that he is “fully committed” to battling inflation. The European Central Bank increased its benchmark interest rates by a record-breaking 75 basis points in the meanwhile.
Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, stated that “ECB boosted interest rates by 75 bps, pushing the euro higher and the dollar index down at 109.08 levels. Brent oil continues below USD 90 per barrel. Asian currencies gain versus the dollar.”
According to Bhansali, the rupee would trade between 79.40 and 79.80 for the duration of the day. The international oil benchmark, Brent crude futures, increased by 0.22% to USD 89.35 a barrel. The 30-share BSE Sensex was up 291.14 points, or 0.49 %, at 59,979.36 on the domestic equities market. The larger NSE Nifty index also increased, rising 104.65 points, or 0.59 %, to 17,903.40.
According to preliminary statistics, foreign institutional investors (FIIs) were net purchasers in the capital markets on Thursday, buying shares worth Rs2,913.09 crore.
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