Rupee rises 13 paise to close at 95.81 against US dollar

The Indian rupee gained 13 paise, closing at 95.81 against the US dollar on Wednesday, according to provisional figures. This rise occurred as crude oil prices fell from their peak levels and after an overnight dip in the US Dollar index. Forex traders attributed the strengthening of the rupee to easing US Treasury yields, which have been at multi-decade highs.

However, the domestic markets' weak performance limited the gains for the domestic unit. The rupee began the day at 95.87 in the interbank foreign exchange market, dipping to a low of 95.98 during the day. By the end of the trading session, it was quoted at 95.81 (provisional) against the greenback, up 13 paise from the previous close.

Analysts predict the rupee to face a negative bias due to uncertainty over the US-Iran deal and global market risk aversion. Additionally, concerns about a strong Dollar and elevated US Treasury yields could further pressure the rupee. Experts also highlighted the importance of upcoming US data, such as ADP non-farm employment, core PCE price index, and final GDP.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was at 101.23, down 0.14 percent. Oil prices, represented by Brent crude, rose 0.58 percent to $103.18 per barrel, marking its lowest level in over 10 days. The rupee's trading range is narrow, as Dollar sales by state-run banks on behalf of the Reserve Bank of India in spot and forward markets are maintaining the USD/INR pair below the 96.00 level.

Furthermore, foreign portfolio outflows amounting to $2.2 billion this month and rising US yields are adding pressure to the USD/INR pair. On the domestic equity market, the Sensex fell 48.78 points to 72,480.29, while the Nifty declined 95.75 points to 22,620.45. Foreign Institutional Investors (FIIs) sold equities worth ₹9,980.22 crore on a net basis on Tuesday.