Rupee rises 4 paise to 83.97 against U.S. dollar in early trade

Forex traders note rupee's rise against dollar due to lower oil prices and foreign fund inflows.

The rupee appreciated by 4 paise to 83.97 against the U.S. dollar in early trade on Thursday (September 5, 2024) supported by the weakening of the American currency in the overseas market and a positive trend in domestic equities.

Forex traders said an overall drop in crude oil prices and foreign fund inflows aided investor sentiments.

At the interbank foreign exchange market, the local unit opened at 83.98, then inched further to touch 83.97, registering a rise of 4 paise from its previous close.

On Wednesday, the rupee breached the crucial 84-mark for the second time within a month and settled 3 paise lower at 84.01 against the American currency.

"The Indian rupee continues to remain weak despite Asian currencies rising as inflows get absorbed by the Reserve Bank, while oil companies and FPIs and importers continue to buy U.S. dollars from the market keeping the currency on the lower side despite gains seen by its Asian and emerging market counterparts," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.03% to 101.32 points.

Brent crude, the international benchmark, gained 0.19% to $72.84 per barrel in futures trade. Forex traders said crude oil levels of $72 per barrel will act as a support for the domestic unit as India, the world's third-largest oil importer, stands to benefit from cheaper oil.