Indian Rupee: Likely To See Recovery In Opening Trades

31 Mar 2022 , 09:09 AM

The Indian rupee is likely to see some recovery against the dollar in opening trades on Thursday, 31 March 2022 as the greenback lingers at its lowest level in nearly a month. Besides, sharp decline in crude oil prices after a surge in the previous session could lend some support to the domestic unit. However, crude oil prices still stay at elevated levels fanning fears of inflation could dampen rupee sentiments.

On Wednesday, rupee declined by 21 paise to 75.94 against the US dollar, snapping a four-day winning streak. At the interbank foreign exchange market, the rupee opened strong at 75.65 against the American dollar but soon entered the negative territory as investors dumped riskier assets. During the session, it swung between a high of 75.62 and a low of 75.97. The local unit finally settled at 75.94 against the dollar, down 21 paise from the previous close.

Domestic benchmark indices surged on Wednesday, rallying for the third trading session. Positive cues from other Asian stock markets boosted sentiment. The barometer index, the S&P BSE Sensex rose 740.34 points or 1.28% at 58,683.99. The Nifty 50 index gained 172.95 points or 1% at 17,498.25. Foreign portfolio investors (FPIs) bought shares worth Rs 1,357.47 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,216 crore in the Indian equity market on 30 March, provisional data showed.

Overseas, Asian stocks are trading mixed on Thursday as oil prices fell sharply. Oil futures dived more than $5 a barrel on Thursday after reports indicated that the Biden administration is weighing releasing some 1 million barrels of oil per day from strategic reserves for several months in a bid to calm soaring crude prices. U.S. stocks fell on Wednesday on waning signs of progress for peace talks between Ukraine and Russia against a backdrop of a hawkish Federal Reserve curbing economic growth.

Meanwhile, the dollar dropped to a nearly a months low in early Asia on Thursday as optimism over peace talks between Russia and Ukraine faded and investors attention shifted to economic data and interest rate expectations. The dollar index, which measures the greenback against a basket of six peer currencies, was down 0.57% at 97.85, having earlier touched its lowest level since March 3.

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