Rupee Rebounds, Closing At 83.33 Against The Dollar As Rate Hike Concerns Ease

A robust surge in domestic equities, driven by foreign fund inflows, also uplifted the sentiment of the rupee.

The rupee recovered from all-time lows to close at 83.33 against the US dollar on Thursday, gaining 7 paise as the greenback weakened in the overseas markets following signals that rate hikes by the US Federal Reserve were over.

A stellar rally in domestic equities fuelled by foreign fund inflows also boosted the rupee sentiment. However, dollar buying by state-run banks and a rise in oil prices capped the rupee gains, forex traders said.

In the interbank foreign exchange market, the rupee initiated the session on a positive note at 83.30 against the previous close of 83.40, marking the lowest closing level against the US dollar.

Trading within a narrow range of 83.35 to 83.27 throughout the day, the rupee ultimately concluded at 83.33, registering a 7 paise increase from the previous close.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, eased by 0.32 per cent to 102.54.

The US Federal Reserve kept its key interest rate unchanged on Wednesday for a third time in a row. The officials also signalled that they expect to make three quarter-point cuts to their benchmark rate next year.

“The crash in the US 10-year yield to 4 per cent will trigger large capital flows to India. The main beneficiaries will be the large caps, particularly the fairly valued large caps in banking. IT too is likely to attract buying,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.

Brent crude futures, the worldwide oil benchmark, experienced a 2.11% increase, reaching USD 75.83 per barrel.

In the domestic equity market, the 30-share BSE Sensex jumped 929.60 points to settle at an all-time high of 70,514.20. The 50-issue Nifty climbed 256.35 points to settle at a record of 21,182.70.

Foreign Institutional Investors (FIIs) were net buyers in the capital market on Wednesday as they bought shares worth Rs 4,710.86 crore, according to exchange data.

were net buyers in the capital market on Wednesday as they bought shares worth Rs 4,710.86 crore, according to exchange data.