Indian rupee likely to strengthen further, says analyst

Upward trend in crude prices and outflow of foreign funds from equities market restricted gain

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A Staff Reporter

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Published: Tue 18 Apr 2023, 9:23 AM

The Indian rupee inched up one paisa to 82 against the US dollar (22.34 against UAE dirham) in early trade on Tuesday, tracking a weak dollar and positive trend in equities.

Forex traders said the upward trend in crude prices and outflow of foreign funds from the equities market restricted the gain.

At the Indian interbank foreign exchange, the rupee opened at 81.99 against the dollar. It went as high as 81.96 and touched the lowest level of 82.02. Later, the rupee was trading at 82, registering a gain of 1 paisa over its previous close.

On Monday, the rupee settled at 82.01 against the dollar.

According to Anand James, chief market strategist at Geojit Financial Services, the Indian currency may see a see-saw movement until it reaches the 81.76 level (22.27 against dirham), indicating an upswing.

“As long as dips do not extend past 81.80, expect upswings. It would, however, require consistent trades above 81.97 to confirm upside intention and set a trajectory towards 82.07 first and then 82.4.

“Alternatively, inability to float above 81.76 could render the trend sideways, with 81.6 continuing to act as a near-term support,” James said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.08 per cent to 102.03.

Brent crude futures, the global oil benchmark, advanced 0.28 per cent to $85 per barrel.

In the Indian equity market, the 30-share BSE Sensex was trading 33.64 points or 0.06 per cent higher at 59,944.39. The broader NSE Nifty was up 19.50 points or 0.11 per cent at 17,726.35.

Foreign Institutional Investors (FIIs) turned net sellers in the capital markets on Monday as they offloaded shares worth Rs5.33 billion, according to exchange data.

(With inputs from PTI)

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