Currency Market News: Rupee rises 31 paise to 85.05 vs US dollar

The rupee opened 31 paise stronger at Rs 85.05 against the US dollar in early trade on Wednesday, buoyed by firm domestic equities and a further easing in retail inflation.

At the interbank foreign‑exchange market, the local unit briefly touched Rs 85.23 before paring some gains. It had closed flat at Rs 85.36 on Tuesday after surrendering early strength.

Currency traders warned that a sharp rise in global crude prices could soon cap the rupee’s advance. Brent crude has hovered near USD 66 a barrel in recent sessions, a level that risks widening India’s trade deficit. In Wednesday’s Asian trade, Brent futures were down 0.54 per cent at USD 66.27.

Also Read:Currency Market News: Rupee gains 3 paise, ends at 85.33 vs dollar

Foreign institutional investors (FIIs) remained net sellers, dumping equities worth Rs 476.86 crore on Tuesday, exchange data showed. The dollar index was marginally softer at 100.95, lending modest support to emerging‑market currencies.

Traders see range‑bound moves

“Exporters will continue to sell on all good upticks, while importers can buy the dips as the rupee is expected to trade in a range,”said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, pegging Wednesday’s band at Rs 84.75- Rs 85.50.

Bhansali noted that oil companies bought dollars on Tuesday as the spike in crude prices prompted importers to step up hedging.

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Stock market summary

Indian equities opened on a cautious note on Wednesday amid mixed global and domestic cues, including easing CPI inflation and optimism around the US-China trade deal. The Nifty50 started the session with a gain of over 60 points, trading above the 24,600 mark, while broader indices mirrored the upward movement in line with benchmark gains.

“India's inflation rose by 3.16 per cent, lower than last month and almost equivalent to expectations. This could give RBI another chance to cut rates next month in its scheduled meeting,”Bhansali added.

(With inputs from PTI)