The Indian rupee appreciated by 35 paise to 71.43 against the US dollar in early trade on Wednesday as gains in domestic equity market and easing crude prices strengthened investor sentiments. Forex traders said reports that half of Saudi Arabia’s daily production has been recovered post-attack enthused investors. Saudi Arabia’s energy minister has said that more than half of the country’s daily crude oil production that was knocked out by an attack had been recovered.
He further noted that the production capacity at its targeted plants would be fully restored by the end of the month.
At the interbank foreign exchange the rupee opened at 71.47 then gained further ground and touched a high of 71.43, registering a rise of 35 paise over its previous close. On Tuesday, rupee had settled for the day at 71.78 against the US dollar.
The domestic unit however could not hold on to the gains and was trading at 71.48 against the dollar at 1001 hrs. Forex traders said investors were optimistic about the US-China trade talks in October. Besides, higher opening in domestic equities supported the local unit.
Domestic bourses opened on a positive note on Wednesday with benchmark indices Sensex trading 42.70 points higher at 36,523.79 and Nifty up 27.30 points at 10,844.90.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose marginally by 0.04 per cent to 98.29. Market participants, however, said sustained foreign fund outflows weighed on local currency.
Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 808.29 crore on Tuesday, according to provisional exchange data. Brent crude futures, the global oil benchmark, fell 0.22 per cent to trade at USD 64.41 per barrel. The 10-year government bond yield was at 6.68 per cent in morning trade.