The rupee appreciated 14 paise to 86.93 against the US dollar in early trade on Thursday, on positive domestic equities and a rise in risk-on sentiments.
Forex traders said the rupee is trading with a positive bias on a rise in risk appetite in the global markets amid hopes of peace between Russia and Ukraine.
Moreover, investors are awaiting cues on the geopolitical front as well as the US FED stance on interest rates.
At the interbank foreign exchange, the rupee opened at 87.04, then touched an early high of 86.93, registering a gain of 14 paise over its previous close.
On Wednesday, the rupee settled on a higher note at 87.07 against the US dollar.
“The rupee may remain cautious, pressured by Fed-driven dollar strength and FII outflows, but supported by easing India-China tension. If the rupee breaches 86.95, it could move toward 86.80 level, while a break above the 87.10 resistance may open the way for a pullback toward the 87.40 level,” CR Forex Advisors MD Amit Pabari said.
India and China have reached a new understanding on the management and control of the frontier during Foreign Minister Wang Yi’s visit to New Delhi, the Chinese foreign ministry said on Wednesday.
Wang visited New Delhi on August 18 and 19, during which he held extensive talks with NSA Ajit Doval and External Affairs Minister S Jaishankar.
Summing up the outcome of Wang’s visit, Chinese Foreign Ministry spokesperson Mao Ning told a media briefing that the two sides also agreed on resuming dialogue mechanisms in various fields, deepening mutually beneficial cooperation, upholding multilateralism, jointly dealing with global challenges and opposing unilateral bullying acts.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.08 per cent to 98.30.
Brent crude, the global oil benchmark, was trading 0.37 per cent higher to USD 67.09 per barrel in futures trade, as investors remained focused on the Ukraine peace push with a bigger-than-expected weekly drop in US crude inventories and sanctions on Russia remaining in place for now.
Traders are focussed on whether US Fed Chief Jerome Powell will push back against market expectations for a rate cut on the September 16-17 meeting when he speaks at the Jackson Hole Symposium on Friday.
On the domestic equity market front, the Sensex climbed 373.33 points to 82,231.17 in early trade, while the Nifty was up 94.3 points to 25,144.85.
Foreign Institutional Investors offloaded equities worth Rs 1,100.09 crore on Wednesday, according to exchange data.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
