The Indian rupee strengthened by 16 paise to 95.03 against the US dollar in early trade on Monday, supported by a positive trend in domestic equities and a weak American currency in the overseas market.
Rupee Opens Higher
At the interbank foreign exchange, the rupee opened at 95.03, registering a rise of 16 paise over its previous close. On Friday, the rupee had settled at 95.19 against the US dollar.
Factors Behind the Gain
Forex traders attributed the rupee's gain to a weak US dollar and positive domestic equity markets. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.10% lower at 95.03.
Meanwhile, the benchmark BSE Sensex rose 150 points, or 0.25%, to trade at 60,000 levels in early deals. The broader NSE Nifty also gained 45 points, or 0.25%, to 17,850.
Foreign Fund Outflow
However, sustained foreign fund outflows and rising crude oil prices capped the rupee's gains. Foreign institutional investors (FIIs) were net sellers in the capital market on Friday, offloading shares worth Rs 1,200 crore, as per exchange data.
Oil Prices
Brent crude futures, the global oil benchmark, rose 0.30% to $85.50 per barrel. Higher oil prices increase India's import bill and put pressure on the rupee.
Analysts said the rupee is likely to trade in a range with a slight appreciation bias, but any sharp move will depend on the direction of global crude oil prices and the US dollar.
