The rupee appreciated 37 paise to 71.19 against the U.S. dollar in early trade at the interbank foreign exchange on Tuesday after crude prices fell to a 14-month low level in international market.
The rise in the rupee was also supported by dollar-selling by exporters and banks and the U.S. unit’s weakness against some currencies overseas ahead of US Federal Reserve Monetary policy decision Wednesday, traders said.
At the interbank forex market, the rupee commenced with strength at 71.34 and appreciated further to quote 37 paise higher at 71.19 against the U.S. dollar.
The rupee had gained 34 paise to close at 71.56 against the U.S. dollar Monday as forex market sentiments were driven by the country’s narrowing trade deficit in November as also smart gains in domestic equities.
Brent crude, the international benchmark, dropped by 1.22% to 14-month low of $58.85 barrel.
The U.S. Federal Reserve’s policy decision is expected on December 19, and market is expecting another rate hike, traders said.
However, a lower opening in the domestic equity market capped the gain in the domestic currency.
The benchmark BSE Sensex fell by 170.50 points, 0.47%, to 36,099.57 in early trade.
