Mumbai: The rupee continued its gaining momentum for the second consecutive day and appreciated 7 paise to settle at 83.18 (provisional) against the US dollar on Wednesday amid robust buying in domestic equities and a weak American currency overseas.
However, unabated withdrawal of funds by foreign institutional investors weighed on the domestic currency, forex analysts said. At the interbank foreign exchange, the rupee opened strong at 83.20 and traded between the intra-day peak of 83.15 and the lowest level of 83.24 against the greenback. The local unit finally settled at 83.18 (provisional), registering a gain of 7 paise from its previous close. On Tuesday, the rupee settled 3 paise higher at 83.25 against the US dollar.
According to Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, the rupee is expected to trade with a slight positive bias on the rise in risk appetite in global markets and softness in the US dollar amid dovish comments by US Federal Reserve officials. However, geopolitical uncertainty due to the ongoing Israel-Hamas conflict may cap a sharp upside.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.09 per cent lower at 105.73.
