Rupee rises 16 paise to close at 96.72 against US dollar

The Indian rupee experienced a 16 paise increase, closing at 96.72 against the US dollar on Friday. This rise mirrored the performance of other Asian currencies, buoyed by a slight devaluation of the US dollar and a dip in crude oil prices. Forex traders attributed the greenback's weakness and falling oil prices to remarks by US President Donald Trump, who indicated the US would avoid military action against Iran prior to the November midterm elections.

Central bank intervention likely provided essential stability to the domestic unit. The rupee opened at 96.74 at the interbank foreign exchange market and fluctuated between 96.51 and 96.77 during intraday trading. By the session's end, it closed 16 paise higher than its previous close of 96.88 from the previous day. Earlier in the week, the rupee declined by 13 paise, reaching 96.88 against the US dollar.

The appreciation came after three days of weakness, aligning with the performance of other Asian currencies. Dilip Parmar, a Senior Research Analyst at HDFC Securities, observed that the positive sentiment stemmed from the President's comments, signaling a departure from military action against Iran ahead of the midterm elections.

Parmar also highlighted that the upbeat sentiment was driven by a surge in risk appetite across global markets following the easing of crude oil prices. The dollar index, which measures the greenback's strength against a basket of six currencies, was at 102.09, a slight decrease of 0.04 percent. Brent crude oil, the global benchmark, saw a 1.28 percent drop to $102.95 per barrel.

Domestic equities fared well, with the Sensex surging 879.09 points to 72,472.33, and the Nifty climbing 288.65 points to 22,520.45. Foreign Institutional Investors (FIIs) had net outflows of Rs 12,943.58 crore on Thursday.