Rupee rises 11 paise to 83.29 against US dollar in early trade on strong GDP data, easing oil prices
The Indian rupee appreciated by 11 paise to 83.29 against the US dollar in early trade on Friday led by strong domestic economic data and gains in the equity market amid softening crude oil prices. The local currency opened higher at 83.28 a dollar as compared to its previous close of 83.40.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09% lower at 103.41.
On Thursday, the rupee settled 7 paise lower at a record closing low of 83.40 a dollar.
India’s gross domestic product (GDP) growth of 7.6% during July-September beat most estimates, including 6.5% projected by the Reserve Bank of India (RBI), retaining the country’s tag of the world’s fastest-growing major economy.
Read here: India remains fastest-growing major economy, Q2 GDP growth beats RBI estimates: 5 key takeaways
Also, another data released simultaneously showed that the output of eight key infrastructure sectors jumped 12.1% in October 2023 against 0.7% expansion in the year-ago period.
“Rupee is likely to appreciate today amid expectation of correction in dollar and US treasury yields as data showed US consumer spending rose moderately in October, while annual increase in inflation was smallest in more than 2 ½ years. Additionally, rise in jobless claims suggest a slowing labor market. Fresh data has raised the bet that the Fed would soon start cutting rates,” ICICI Direct said in a report.
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Moreover, India’s economy expanded 7.6% in Q2 FY24 exceeding expectations. Meanwhile, investors will remain cautious ahead of Fed Chair Powell’s speech to get more cues on interest rate outlook. USDINR may slip to 83.25 level as long as it stays below 83.50 levels, it added.
Crude price retreated from the level of $84 to $80 per barrel as oil producing countries’ grouping OPEC announced no new target to reduce production for 2024, said forex traders.
Global oil benchmark Brent crude futures declined 0.28% to $80.63 per barrel.
Also Read: Nifty 50 hits all-time high led by banks, metals, auto stocks; small, midcaps support rally
On the domestic equity market front, the benchmark index Nifty 50 hit its record high on Friday led by strong buying in metals, banks and auto stocks.
The BSE Sensex was trading 454.54 points, or 0.68%, higher at 67,442.98, while the broader NSE Nifty rose 124.60 points, or 0.62%, to 20,257.75.
On Thursday, the Foreign institutional investors (FIIs) net bought Indian shares worth ₹8,147.85 crore, while Domestic Institutional Investors (DIIs) net sold shares to the tune of ₹780.32 crore, as per provisional data available on the exchanges.
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(With inputs from PTI)
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Updated: 01 Dec 2023, 11:01 AM IST
