After two days of sharp losses, the rupee started to rebound against the US dollar on Wednesday and ended up rising 6 paise to 83.22 (provisional) on the back of positive effects from domestic equities.
However, selling pressure from foreign equity investors weighed on local units as the dollar strengthened and crude oil prices soared, foreign exchange traders said.
In terms of inter-bank foreign exchange, the domestic unit opened at 83.23 and fluctuated within a narrow range against the US dollar from 83.18 to 83.24. It finally closed at 83.22 (provisional), up 6 paise from the previous closing price.
The rupee fell by 34 paise in the last two sessions. On Tuesday, the currency fell 15 paise to close at 83.28 paise against the US dollar, after falling by 19 paise against the US dollar the previous day.
The rupee’s fall came as a record rise in U.S. Treasury yields led to a stronger dollar. Additionally, the dollar surged to a ten-month high after Federal Reserve policymakers signaled an extension of the rate hike cycle.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.05% to 106.28.
Brent crude futures, the global oil benchmark, rose 0.87% to $94.78 a barrel.
On the domestic stock market front, the BSE Sensex closed 173.22 points, or 0.26 per cent, higher at 66,118.69 points. The broader NSE Nifty gained 51.75 points or 0.26% to end at 19,716.45 points.
Foreign institutional investors (FIIs) turned out to be net sellers in the capital market on Tuesday as they offloaded shares worth Rs 693.47 crore, according to exchange data.