The rupee rebounded from its all-time low levels and gained 15 paise to trade at 91.50 against the US dollar in early deals on Thursday, on improved risk appetite after Donald Trump said that he had no intention of applying tariffs on Europe for Greenland acquisition.
Forex traders said investors’ sentiments improved after President Trump announced in Davos on Wednesday that he was scrapping his planned tariffs on eight European nations in an effort to force US control over Greenland.
Moreover, a positive trend in domestic equities also helped in the rebound of the domestic unit.
At the interbank foreign exchange, the rupee opened at 91.54 then gained ground to trade at 91.50 against the greenback, up 15 paise from its previous close.
On Wednesday, the rupee plunged 68 paise to close at an all-time low of 91.65 against the American currency.
Forex traders, however, said the currency remains under severe pressure from heightening global geopolitical uncertainties.
The pending trade agreement with the US remains a key stabilising factor. Until the geopolitical risk eases and the trade deal materialises, the rupee is likely to remain vulnerable to external shocks, they said.
According to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, Asian equities are up giving some relief and rupee witnessed a rebound after Trump’s speech in Davos in which he avoided confrontation with European Nations to some extent and also said that a framework has been reached on Greenland.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.02 per cent higher at 98.78.
Brent crude, the global oil benchmark, was trading 0.17 per cent higher at USD 65.35 per barrel in futures trade.
On the domestic equity market front, Sensex advanced 533.37 points to 82,443 in early trade, while the Nifty was up 157.20 points to 25,314.70.
Foreign institutional investors offloaded equities worth Rs 1,787.66 crore on Wednesday, according to exchange data.
(Disclaimer: 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.)
