Rupee trades flat against US dollar amid gains in equities

The rupee edged up 1 paisa to 83.21 against the US currency in a restricted trade on Thursday amid gains in domestic equities.

The Indian currency was almost trading flat in the early session as gains from firm domestic stocks were offset by a rise in crude oil prices and the US dollar index remaining above the 106-mark against the leading currencies, forex dealers said.

The rupee opened flat at 83.22 against the US dollar and later moved in a range of 83.25 to 83.20 in morning deals. It was trading at 83.21 to US dollar at 9.35 am, up by 1 paisa over the previous close.

The domestic unit settled at 83.22 on Wednesday after a listless trade.

It traded in a narrow range on Wednesday despite broader gains in the dollar against its major crosses, Gaurang Somaiya, forex and bullion analyst at Motilal Oswal Financial Services, said.

The hawkish tone in the recent Federal Reserve meeting has been confirmed by Fed officials in recent days, as they flagged the possibility that the central bank would need to raise interest rates further after pausing its rate-hiking cycle last week, he added.

Elevated US yields have spelt trouble for the yen, which slipped to an 11-month low against the US dollar.

“We expect the USDINR(Spot) to trade sideways and quote in the range of 83.05 and 83.30,” Somaiya said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was flat at 106.67.

Brent crude, the global oil benchmark, was trading 0.75 per cent higher at $97.27 per barrel.

On the domestic equity market front, the BSE Sensex climbed 287.32 points to 66,406.01 in early trade. Nifty advanced 50.2 points to 19,766.65.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth ₹354.35 crore, according to exchange data.