The Indian rupee strengthened for the fourth consecutive trading session on Wednesday, supported by a weaker US dollar, positive domestic equity sentiment and renewed foreign investor buying.
At the interbank foreign exchange market, the rupee opened at Rs. 95.70 against the US dollar before trading at Rs. 95.77, registering a gain of 5 paise from its previous close. The local currency had settled 17 paise higher at 95.82 on Tuesday after gaining 74 paise during the previous two sessions.
According to forex traders, the rupee received support from firm domestic equities and Foreign Institutional Investors (FIIs) turning net buyers in the Indian stock market.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, declined 0.12% to 101.14 ahead of the US Federal Reserve’s monetary policy announcement.
Domestic stock markets also opened higher. The Sensex advanced 682.57 points, or 0.89%, to 77,448.49, while the Nifty 50 gained 186.85 points, or 0.78%, to reach 24,172.20.
FIIs purchased equities worth Rs. 755.33 crore on a net basis on Tuesday, according to exchange data. The return of foreign buying improved sentiment toward Indian assets and provided additional support to the local currency.
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Brent crude futures were trading 4.27% higher at $87.68 per barrel. According to analysts, oil prices rose after fresh geopolitical tensions emerged following reports of Iranian missile attacks on American forces.
The US Central Command said all Iranian missiles were successfully intercepted, adding that US forces “remain vigilant and at a high state of readiness.”
India is a major importer of crude oil, and higher energy prices can increase demand for dollars while putting pressure on the rupee. The currency’s near-term movement is expected to remain influenced by the Federal Reserve’s policy signals, crude oil prices, foreign investment flows and domestic equity performance.