The Indian rupee appreciated by 20 paise to 94.20 against the US dollar in early trade on Wednesday, extending gains from the previous session. On Tuesday, the rupee had settled 10 paise higher at 94.40 against the greenback.
Rupee Gains Momentum
Forex traders attributed the rupee's strength to positive domestic equities and sustained foreign fund inflows. The local unit opened at 94.30 and touched a high of 94.20 in initial deals, marking a 20-paise rise from its previous close.
Factors Supporting Rupee
Analysts noted that the dollar index, which measures the greenback's strength against a basket of six major currencies, was trading marginally lower, providing support to emerging market currencies. Additionally, robust macroeconomic data and improved risk appetite boosted investor sentiment.
Market Outlook
Market participants are closely watching the Reserve Bank of India's monetary policy stance and global cues for further direction. The rupee is expected to trade in a narrow range with a slight appreciation bias, supported by strong fundamentals and capital inflows.
Meanwhile, the benchmark BSE Sensex rose 150 points in early trade, reflecting positive sentiment in the broader market.
