Rupee rises 5 paise to 83.05 against US dollar

Mumbai: The rupee recovered from its all-time low levels and appreciated by 5 paise to 83.05 against the US dollar in early trade on Monday tracking a positive trend in domestic equities.

Forex traders said the rupee is likely to trade with a negative bias on risk aversion in global markets and a rising US dollar.

At the interbank foreign exchange, the domestic unit opened at 83.10, then touched a high of 83.05 against the American currency, registering a rise of 5 paise over its last close.

On Friday, the rupee edged lower by 1 paisa to settle at an all-time low of 83.10 against the US dollar, weighed down by a negative trend in domestic equities, and foreign fund outflows.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.02 per cent to 103.39.

Dollar witnessed its longest winning streak in the last 15 months following safe haven buying on the back of uncertainty in China and better-than-expected economic numbers from the US, said Gaurang Somaiya, forex and bullion analyst, Motilal Oswal Financial services.

Rising uncertainty over economic recovery in China is leading to weakness in the Chinese Yuan and thereby weighing on the rupee, Somaiya added.

Most investors will be taking cues from the BRICS summit and the Jackson Hole Symposium. "We expect the USDINR(Spot) to trade sideways and quote in the range of 82.80 and 83.30," Somaiya said.

Brent crude futures, the global oil benchmark, rose 0.73 per cent to USD 85.42 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 117.43 points or 0.18 per cent higher at 65,066.09. The broader NSE Nifty advanced 26.40 points or 0.14 per cent to 19,336.55.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday as they offloaded shares worth Rs 266.98 crore, according to exchange data.

Meanwhile, India's foreign exchange reserves jumped USD 708 million to USD 602.161 billion for the week ended August 11, the Reserve Bank of India (RBI) said on Friday.

This is the first increase in the kitty after declining for three consecutive weeks. In the previous week, the overall reserves had declined USD 2.417 billion to USD 601.453 billion.