Dollar vs Rupee: Trump's threat ineffective, Rupee strengthened by 23 paise against US dollar

Mumbai: The rupee on Wednesday closed 23 paise higher at 86.35 against the American currency amid a positive trend in the domestic stock market and weakness in the dollar index. Forex traders said the rupee may see higher volatility with a negative bias ahead of major economic developments at the global and domestic level. Additionally, uncertainty over the global economy kept both currencies and commodities under pressure, keeping investors worried. The rupee opened at 86.56 against the dollar in the interbank foreign exchange market.

During trading, it reached a high of 86.30 and a low of 86.71 against the dollar. It finally closed at 86.35 per dollar, a rise of 23 paise against the US dollar. On Tuesday, the rupee had fallen 13 paise to 86.58 against the US dollar.

What did the experts say?

Anuj Chaudhary, Research Analyst, Mirae Asset Sharekhan, said the rupee is expected to remain largely weak due to underlying strength in the US dollar and overall weakness in domestic markets. Importer demand for the dollar may also put pressure on the rupee. However, any prolonged selling in crude oil may provide support to the rupee at lower levels. He said that due to the statements and announcements coming from the Trump administration, there may be some fluctuations in the market. The dollar-rupee spot price is expected to be between 86.20 and 86.65.

Dollar index declined by 0.15 percent

Meanwhile, the dollar index, which gauges the US dollar's position against six major currencies, was down 0.15 per cent at 107.89. International standard Brent crude rose 0.48 percent to $ 79.67 per barrel. Due to fears of strict US policies, crude oil prices softened to $ 78 per barrel. This is a decline of four percent from the recent high after President Trump mentioned increasing US oil production.

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In the domestic stock market, the 30-share BSE Sensex rose 566.63 points to close at 76,404.99, while the NSE Nifty rose 130.70 points to 23,155.35. According to stock market data, foreign institutional investors (FIIs) were net sellers in the capital market. He sold shares worth Rs 4,026.25 crore on Wednesday.