India News | Rupee Edges Up 3 Paise to 81.99 Against US Dollar Amid Rate Hike Fears

New Delhi, Apr 10 (PTI) The rupee pared its early gains to close 3 paise higher at 81.99 against the US dollar on Monday as a resurgent greenback amid expectations of Fed rate hike and firm crude oil prices weighed on the local unit.

Foreign fund inflows and stock markets advancing for the sixth day in a row supported the rupee.

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At the interbank foreign exchange market, the local unit opened at 81.90 against the US currency and moved in a range of 81.78 and 81.99 in the day trade.

The local unit finally settled at the day's low of 81.99, showing gains of 3 paise over the previous close. On Thursday, the rupee closed at 82.02 against the US currency. Equity and forex markets were closed on April 7 on account of Good Friday.

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The dollar index, which gauges the greenback's strength against a basket of six currencies, rebounded 0.69 per cent to 102.80 as investors bet on further hie in US Fed rates following a strong jobs report.

Global oil benchmark Brent crude futures advanced 0.05 per cent to USD 85.16 per barrel.

According to Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas, a below-normal monsoon forecast by Skymet and a strong dollar in early Asian trade weighed on the rupee but positive domestic equities cushioned the downside.

The dollar strengthened as non-farm payrolls, though slightly below forecast, indicate a tight labour market. Unemployment rate also slipped to 3.5 per cent from 3.6 per cent. This raised odds that Fed may hike interest rates by 25 bps in its FOMC meeting in May, Choudhary said.

"We expect Indian rupee to trade with a slight negative bias on strong US Dollar and positive crude oil prices," Choudhary said. However, positive global markets and fresh FII inflows may support the rupee at lower levels.

Investors may look forward to CPI, Federal Open Market Committee (FOMC) minutes retail sales and industrial production data.

"Rupee after a positive opening near 81.80 witnessed selling pressure towards 81.97 as crude prices stayed higher," said Jateen Trivedi, VP Research Analyst at LKP Securities.

"FII's positive flow helps rupee as prices stay sideways near 82.00 but crude price positive moves can keep rupee weak towards 82.20 once 82.00is breach," Trivedi added.

On the domestic equity market front, benchmark indices continued their winning run for a sixth day with the 30-share BSE Sensex advancing 13.54 points or 0.02 per cent to end at 59,846.51 and the broader NSE Nifty rising by 24.90 points or 0.14 per cent to 17,624.05.

Foreign Institutional Investors (FIIs) were net buyers in the capital market on Monday as they purchased shares worth Rs 882.52 crore, according to exchange data.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)