Mumbai: The Indian rupee strengthened by two paise to Rs 95.43 per dollar in early trade on Friday amid weak trend of the US dollar. However, withdrawal of foreign capital from the domestic stock market and rise in crude oil prices amid global uncertainties remain a cause of pressure on the rupee.
Rupee opened at 95.39
The rupee opened at 95.39 per dollar in the interbank foreign exchange market. After this it came to the level of 95.43 against the American currency. This is a slight increase of two paise compared to the previous closing price.
On Thursday, the rupee had weakened by 12 paise and closed at 95.45 per dollar.
Dollar index also declined
The dollar index, which gauges the position of the US dollar against six major currencies of the world, fell 0.08 percent to 99.78. The effect of weakness in the dollar was visible in the form of slight strengthening of the rupee in early trade.
However, according to market experts, the movement of rupee remains influenced by both domestic and global factors.
Pressure on rupee due to crude oil prices
The future price of international oil standard Brent crude rose 0.16 percent to $ 87.21 per barrel.
A rise in crude oil prices could pose a challenge to the Indian rupee, as India depends on imports for a large part of its energy needs. In such a situation, expensive crude oil can affect the demand for the dollar and the import cost.
Selling by foreign investors continues
Withdrawal of foreign capital from the domestic stock market is also increasing pressure on the rupee. According to stock market data, foreign institutional investors (FIIs) sold shares worth Rs 510.69 crore on a net basis on Thursday.
Selling by foreign investors is likely to increase demand for dollars and put pressure on the rupee.
Sensex and Nifty also in decline
The initial trading in the domestic stock market also remained weak on Friday. The Sensex fell 315.50 points or 0.40 percent to 77,764.46.
Whereas Nifty was trading at 24,321.95 points with a decline of 72.70 points or 0.30 percent.
Thus, despite the slight strengthening of the rupee, the weakness of the domestic stock market, selling by foreign investors and crude oil prices remain important factors for the Indian currency.
Also read: Share Market Opening: Sensex fell by 300 points, Nifty also slipped; US-Iran tension increases investors' concerns