Rupee gains 12 paise to close at 86.44 against US dollar

Rupee strengthened for the fourth consecutive session, rising 12 paise to close at 86.44 (provisional) against the US dollar on Wednesday. 

The appreciation was supported by a positive trend in domestic equities and lower global crude oil prices. However, gains were capped as the US dollar strengthened ahead of the Federal Reserve’s interest rate decision, forex traders said.  

At the interbank foreign exchange, the rupee opened at 86.60, hitting an intraday low of 86.68 and a high of 86.43 before settling at 86.44, up 12 paise from the previous close. On Tuesday, it had gained 25 paise to close at 86.56.  

According to Dilip Parmar, senior research analyst at HDFC Securities, the rupee's rally was driven by renewed foreign capital inflows after a period of sustained selling in domestic equities, along with strong high-frequency data boosting market sentiment. He noted that the near-term outlook remains favourable, with the support level for Spot USDINR shifting to 86.17 from 86.42, while resistance stands at 86.90.  

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, highlighted strong domestic institutional investor (DII) inflows and foreign institutional investor (FII) buying in the cash market as additional factors supporting the rupee. "With the Fed’s policy announcement tonight, market participants will closely watch the forward guidance for any shifts in monetary policy," he said.

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"The rupee range is expected between 86.15-86.80, with further movement dependent on global cues and Fed commentary," he further added.

Meanwhile, the US dollar index, which measures the greenback's strength against a basket of six currencies, was up 0.36 per cent at 103.26. Brent crude, the global oil benchmark, fell 0.77 per cent to USD 70.02 per barrel in futures trade.  

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Stock market summary: Sensex, Nifty extend gains 

Indian equities extended their winning streak for the third straight session on March 19, with the Sensex rising 148 points to close at 75,449.05, while the Nifty gained 73 points to settle at 22,907.60. The rally was led by realty and metal stocks, while IT and FMCG sectors faced selling pressure.

(With inputs from agencies)