Rupee surges 51 paise to 86.17 against US dollar amid strong equities, weaker greenback

In early trade at the interbank foreign exchange, the rupee opened at 86.22 against the US dollar, marking a gain of 46 paise from its previous close. It later strengthened further to 86.17. On Wednesday, the local currency had settled at 86.68 against the greenback.

Mumbai: The rupee rose sharply by 51 paise against the US dollar to 86.17 in early trade on Friday amid a strong opening in the domestic equity markets, a weakening greenback, and decline in oil prices.

The rise in the local unit comes a day after US President Donald Trump suspended the additional 26 per cent tariffs on India till July 9.

At the interbank foreign exchange, the domestic unit opened at 86.22 against the US dollar, up 46 paise from the previous close, before rising further to 86.17. The rupee had closed at 86.68 against the greenback on Wednesday.

Equity, forex, commodity markets were closed on Thursday on account of Shri Mahavir Jayanti.

“Rupee is expected to rise above 86 with dollar index down below its September low of 100.20 with expectations of a further fall to 95 levels. A good uptick has allowed exporters to cover their exports holding and any upside due to risk aversion should be utilised for further covers,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

He added that the domestic unit is likely to trade in the range of 86.00-86.60 during the day.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.81 per cent lower at 100.04.

Bhansali said the dollar index declined to decades low against Swiss Franc on Friday as waning confidence in the US economy prompted investors to ditch US assets to the benefit of safe havens like franc and yen, euro and gold.

Brent crude, the global oil benchmark, fell 0.27 per cent to USD 63.16 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex rose sharply by 1,204.02 points, or 1.63 per cent, to 75,051.17, while the Nifty went up 385.25 points, or 1.72 per cent, to 22,784.40.

Foreign institutional investors (FIIs) offloaded equities worth Rs 4,358.02 crore on a net basis on Wednesday, according to exchange data.