The rupee recovered from initial losses to settle 11 paise higher at 71.43 against the U.S. currency on October 16, tracking gains in domestic equity markets and softening crude oil prices.
Foreign fund inflows also supported the local currency, Forex trader said.
At the interbank foreign exchange market, the rupee opened at 71.60 against the U.S. dollar. During the day, the domestic unit fluctuated between a high of 71.36 and a low of 71.71.
On October 15, the domestic unit had settled at 71.54.
“Strong equity markets, FII inflows, lower Brent crude prices and ICE Dollar Index helped the rupee recoup some of the losses seen on the previous day,” said V.K. Sharma, Head - PCG & Capital Market Strategy, HDFC securities.
Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services Private Ltd. said, “The rupee traded in a range as market participants remained cautious ahead of the important Brexit summit scheduled later this week. On the domestic front, focus will now shift to RBI meeting minutes that will be released on Friday and dovish outlook could keep the rupee under pressure.”
Meanwhile, Brent futures, the global oil benchmark, traded below $59 per barrel level on trade uncertainty.
Foreign institutional investors (FIIs) remained net buyers in the capital markets, as they infused ₹686.33 crore on October 15, exchange data showed.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.05% to 98.34.
The 10-year government bond yield was at 6.47% on October 16.
On the domestic market front, the 30-share Sensex ended 92.90 points, or 0.24%, higher at 38,598.99. It hit an intra-day high of 38,666.38 and a low of 38,416.67. The broader NSE Nifty rose 35.70 points, or 0.31%, to settle at 11,464.
The Financial Benchmark India Private Ltd. (FBIL) set the reference rate for the rupee/dollar at 71.3186 and for rupee/euro at 78.7419. The reference rate for rupee/British pound was fixed at 90.4134 and for rupee/100 Japanese yen at 65.82.
