In early trade on Friday, the rupee gained 11 paise to 95. 63 against the US dollar as investors anticipated the RBI policy decision and as the India-US trade talks had produced positive news.
Forex dealers predicted that the rupee will gradually return to the 95. 00-95. 20 area in the near term if the RBI indicates a cautious attitude toward inflation and currency stability in its policy decision, as the 96. 00 zone continues to be a formidable resistance area for USDINR.
In early trading on the interbank foreign exchange market, the rupee opened at 95. 72 before reaching 95. 63, a gain of 11 paise from its prior close.
The rupee increased by 2 paise on Thursday, closing at 95. 74 versus the US dollar.
The dollar index, which measures the strength of the greenback versus six different currencies, was up 0. 01 percent at 99. 41 at the same time.
The worldwide oil benchmark, Brent crude, rose 0. 40% to USD 95. 41 per barrel in futures trading.
Traders said that market players are now concentrating on the Reserve Bank of India’s MPC rate announcement on June 5 as inflation, growth, and the rupee are in the spotlight.
According to Amit Pabari, managing director of CR Forex Advisors, a more cautious RBI stance on inflation would further support debt inflows into India, giving the rupee additional cushion.
In addition to the promising news from the India-US trade talks, Pabari said that with the talks nearing their conclusion, investors are optimistic that progress on trade might enhance sentiment and boost future capital flows into India. Markets are also awaiting the RBI.
Sensex gained 269. 93 points to 74,629. 94 in early trading on the domestic equity market, while Nifty rose 62. 4 points to 23,478. 95.
Exchange data reveals that foreign institutional investors sold shares worth Rs 4,447. 06 crore on a net basis on Thursday.
Meanwhile, US President Donald Trump has stated that Prime Minister Narendra Modi is a good buddy and expressed certainty that the United States and India will come to a trade deal.
“We’re going to strike a deal and get along well. Because I really like your Prime Minister, we will reach an agreement. He is one of my closest companions”, Trump stated at the Oval Office on Thursday.