The Indian rupee showed strength against the US dollar on Thursday. The domestic currency closed at 94.39 per dollar (provisional) with a gain of 16 paise. Experts believe that the continuous fall in crude oil prices in the international market and the weakness of the dollar played an important role in strengthening the rupee. India imports most of its crude oil needs. In such a situation, when oil prices fall, the demand for foreign currency decreases, which provides support to the rupee.
Also benefited from the rise in stock market
According to foreign exchange market experts, the positive environment in the domestic stock markets also strengthened the rupee. In the day’s trading, the rupee opened at 94.30 and traded in the range of 94.13 to 94.56. Finally it closed at 94.39 per dollar. Earlier on Wednesday, the rupee had strengthened by 21 paise and closed at 94.55 per dollar. The strengthening of rupee for the second consecutive day has increased the confidence of investors.
FII selling becomes a concern
However, despite the rise in rupee, selling by foreign institutional investors (FIIs) remains a matter of concern. According to stock market data, foreign investors sold shares worth Rs 1,843.40 crore on Wednesday. For this reason, the rise of the rupee remained limited. Experts say that if the selling by foreign investors continues, the pressure on the rupee may increase in the coming days.
Dollar index and Brent crude softened
The dollar index, which shows the position of the dollar against six major currencies of the world, fell by 0.04 percent to 101.57. At the same time, the price of Brent crude in the international market decreased by 1.33 percent to about $ 72.76 per barrel.
According to Anuj Chaudhary, Research Analyst, Mirae Asset Sharekhan, the fall in commodity prices and the weakening of the dollar are positive signs for the rupee. However, due to the strict stance of the US Federal Reserve, the dollar may get support, due to which the rupee may remain volatile.
Market keeps an eye on global signals
Strength was also seen in the domestic stock markets. Sensex closed at 77,100.47 with a gain of 109 points and Nifty closed at 24,056 with a gain of 34 points. In the coming days, investors will keep an eye on the policies of the US Federal Reserve, crude oil prices and activities of foreign investors, which will play an important role in deciding the direction of the rupee.
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