Rupee Gains 23 Paise to 96.65 Against US Dollar on Softer Greenback, RBI Support

At the interbank foreign exchange market, the rupee opened at 96.74 before gaining further to touch 96.65, compared with its previous close of 96.88. On Thursday, the domestic currency had weakened by 13 paise against the dollar.

The early recovery came as the US dollar index eased towards the 102 level and Brent crude prices declined to around $103 per barrel. Market sentiment also responded to US President Donald Trump’s remarks that an attack on Iran would take place only after the US midterm elections, alongside his reference to productive discussions between Washington and Tehran.

Market experts attributed the dollar’s weakness partly to falling US Treasury yields following a well-received auction of 30-year government bonds, indicating continued investor demand for long-term debt.

They added that lower crude prices had eased some inflation concerns. Markets were assigning an 82 per cent probability to the US Federal Reserve keeping interest rates unchanged this month, while the probability of a rate hike in December stood near 81 per cent, according to the assessment cited.

Federal Reserve Governor Christopher Waller said further rate increases would likely be required to bring inflation back to the central bank’s 2 per cent target, while noting that policymakers retained flexibility over the pace of monetary tightening.

Indian equity markets also opened higher, supported by buying in information technology shares. The Sensex rose 183.43 points, or 0.26 per cent, at the opening, while the Nifty gained 83.15 points, or 0.37 per cent, to open at 22,314.95.

Meanwhile, foreign institutional investors sold equities worth Rs 12,943 crore on Thursday, while domestic institutional investors bought shares worth Rs 10,703 crore. Foreign investors have offloaded equities worth Rs 36,210 crore through exchanges so far in October.