Rupee surges 14 paise to 72.92 against US dollar in early trade

The Indian rupee strengthened by 14 paise to 72.92 against the US dollar in early trade on Friday supported by positive domestic equities and weak American currency. At the interbank foreign exchange, the domestic unit opened at 72.97 against the dollar, then gained further ground and touched 72.92, registering a rise of 14 paise over its previous close.

On Thursday, the rupee had closed at 73.06 against the US dollar. Following the elevated US inflation, markets hope that the Fed will remain dovish in their stance and keep buying bonds and keep interest rates steady at current levels at least for another year, Reliance Securities said in a research note.

”This will continue to weigh on the dollar and could continue to lend support,” the note added. On the domestic equity market front, the 30-share BSE Sensex was trading 236.51 points or 0.45 percent higher at 52,536.98. Similarly, the broader NSE Nifty advanced 73.60 points or 0.47 percent to 15,811.35.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.10 percent at 89.98. Foreign institutional investors (FIIs) remained net buyers in the capital markets, as they purchased shares worth Rs 1,329.70 crore on Thursday, as per provisional data.

Brent crude futures, the global oil benchmark, were trading down 0.34 percent at USD 72.27 per barrel. ”The only concern for the market will be rising crude prices. Currently, Brent is trading above USD 72.00/ barrel and further gains while weigh on sentiments,” the Reliance Securities’ note said.

Investors could look for cues from the IIP data and forex reserves data to be released later in the day, the note said.