Rupee gains 39 paise to close at 82.20 against US dollar

Mumbai: The rupee gained 39 paise to close at 82.20 against the US dollar on Thursday, tracking the weakness of the American currency in the overseas market.

Traders said the weak US Dollar and decline in US Treasury yields on the back of dovish Federal Open Market Committee (FOMC) boosted investor sentiments.

The 25 basis points interest rate hike by the US Federal Reserve was on the expected lines, and the declining crude oil prices boosted the overall sentiments, they added.

At the interbank foreign exchange, the domestic unit opened strong at 82.38 against the dollar and gained further ground and finally settled at 82.20 against the American currency, registering a gain of 39 paise against its previous close.

In intra-day trade, the rupee touched a high of 82.08 and hit the lowest level of 82.41 against the greenback.

On Tuesday, the rupee settled at 82.59 against the US dollar.

The foreign exchange market was closed on Wednesday on account of Gudi Padwa.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04 per cent higher at 102.38.

Global oil benchmark Brent crude futures declined by 0.85 per cent to USD 76.04 per barrel.

According to Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas, the Indian rupee appreciated amid weak US Dollar and decline in US Treasury yields on the back of dovish FOMC.

The US Federal Reserve hiked interest rates by 25-bps to 4.75-5 per cent range.

Dollar also fell after US Treasury Secretary Janet Yellen said that the regulators have no plans to insure all deposits.

Global equities may also recover on dovish FOMC which may be supportive for the domestic currency. However, selling pressure from foreign investors and month-end Dollar demand from importers may cap sharp gains in Rupee, Choudhary said.

Recovery in crude oil prices may also cap the upside. Traders may take cues from weekly unemployment claims, current account balance and new home sales data from the US, Choudhary added.

He further noted that traders may also now look forward to Bank of England’s monetary policy. There are expectations of a 25-bps rate hike.

The 30-share BSE Sensex closed 289.31 points or 0.50 per cent lower at 57,925.28 points while the broader NSE Nifty fell 75.00 points or 0.44 per cent to 17,076.90 points.

Foreign Institutional Investors (FIIs) turned net buyers in the domestic capital market on Wednesday as they purchased shares worth Rs 61.72 crore, according to exchange data.