Forex traders said that likely intervention by the Reserve Bank of India and a firm trend in domestic equities further enthused investors.
At the interbank foreign exchange, the rupee opened below the 88-mark at 87.76 against the greenback, and touched an intraday high of 87.68 per dollar. The domestic unit finally settled at 87.87 (provisional) against the greenback, registering a rise of 21 paise over its previous close.
On Wednesday, the rupee bounced back sharply by 73 paise to close at 88.08 against the US dollar, posting its biggest intraday gain in nearly four months.
“The rupee notched a second consecutive day of gains, buoyed by a softer dollar against major currencies and a broader shift towards risk-on sentiment. Foreign fund inflows and strategic central bank intervention provided a significant tailwind to the currency’s recent advance,” said Dilip Parmar, Research Analyst, HDFC Securities.
Parmar further said that ahead of the forthcoming holiday, the rupee is poised to tread water within a constrained range. However, its subsequent direction hinges entirely upon the dynamics of dollar flows and any tectonic shifts in the global geopolitical landscape.In the near-term, spot USD/INR exhibits support at 87.60 and resistance at 88.70.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.21 per cent lower at 98.58.
Brent crude, the global oil benchmark, was trading 0.36 per cent higher at USD 62.12 per barrel in futures trade.
On the domestic equity market front, Sensex jumped 862.23 points to settle at 83,467.66, while the Nifty surged 261.75 points to 25,585.30.
Foreign Institutional Investors (FIIs) purchased equities worth Rs 68.64 crore on Wednesday, according to exchange data.
Meanwhile, India’s exports grew 6.74 per cent to USD 36.38 billion in September, while imports jumped 16.6 per cent, widening the trade deficit to USD 31.15 billion, the highest in over a year.
