Rupee Rises 7 Paise To Close At 93.70 Against US Dollar

The rupee appreciated 7 paise to close at 93.70 against the US dollar on Wednesday, supported by gains in domestic equity markets, foreign capital inflows and expectations of support from easing global crude oil prices.

At the interbank foreign exchange market, the rupee opened at 93.71 against the US dollar and moved between an intra-day high of 93.63 and a low of 93.88 before settling at 93.70. The domestic currency had appreciated 21 paise to close at 93.77 on Monday. Markets remained closed on Tuesday on account of Diwali Balipratipada.

Forex market participants said strong domestic market sentiment and sustained foreign portfolio inflows supported the rupee. However, a stronger US dollar and rising US Treasury yields restricted its gains.

The dollar strengthened following higher-than-expected US consumer price inflation, increasing expectations of a possible Federal Reserve rate hike in December.

"We expect the rupee to trade with a positive bias on strength in domestic markets and foreign inflows. Falling global crude oil prices may also support the rupee," said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan.

He added that the strength of the greenback and rising US Treasury yields could limit further appreciation. The USD/INR spot rate is expected to trade in a range of 93.40 to 93.95.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, rose 0.27 per cent to 102.50. Brent crude, the global oil benchmark, was trading 1.01 per cent higher at USD 92.41 per barrel in futures trade.

On the investment front, foreign institutional investors (FIIs) purchased equities worth Rs 7,212.22 crore on Monday, according to exchange data.

Foreign investors turned net buyers of Indian equities in November, investing Rs 53,739 crore in the first nine days, following net outflows of Rs 34,843 crore in October and Rs 35,861 crore in September.