Mumbai, Jan 24: Rupee appreciated 22 paise to close at 86.22 (provisional) against the US dollar on Friday, as a decline in the US dollar index supported investor sentiments.
Forex traders said weak crude oil prices also supported the local unit, while sustained foreign fund outflows weighed on the local unit.
Traders further noted that the upcoming Union Budget will play a crucial role in shaping market sentiment and the rupee’s trajectory.
At the interbank foreign exchange, the rupee opened on a strong note at 86.31 against the greenback. During the day, the local unit touched an intraday high of 86.16 and a low of 86.36.
It finally closed at 86.22 (provisional), rising 22 paise against the US dollar from previous close.
On Thursday, the rupee declined 9 paise to settle at 86.44 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading down 0.56 per cent to 107.44.
The Dollar Index has recently surged, reaching a high of 110, fuelled by escalating uncertainty surrounding the “Trump factor”. However, this rally in the Dollar Index is unlikely to be sustained as global uncertainties subside and Trump-related risks diminish, CR Forex Advisors – MD Amit Pabari said.
Moreover, at the World Economic Forum in Davos, Switzerland, US President Donald Trump called for an immediate interest rate cut by the Federal Reserve, a move that will generate a negative sentiment for the DXY, Pabari added.
Meanwhile, Brent crude, the global oil benchmark, rose 0.47 per cent to USD 78.66 per barrel in futures trade.
Brent oil was trading at USD 78.03 per barrel as Trump asked Saudi to lower prices so that he could make Russia stop the war. He has also threatened sanctions against Russia if they do not get out of the war, Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP, said.
In the domestic equity market, the 30-share BSE Sensex fell 329.92 points, or 0.43 per cent, to settle at 76,190.46 points, while the Nifty declined 113.15 points, or 0.49 per cent, to 23,092.20 points.
Foreign Institutional Investors (FIIs) remained net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 5,462.52 crore, according to exchange data. (PTI)
