Rupee ends 47 paise higher against the dollar on Wednesday

The rupee ended 47 paise stronger on Wednesday due to dollar inflows in the backdrop of foreign portfolio investors eyeing investments in public offerings by Indian companies and due to the weakening of the greenback.

The Indian unit closed at 74.88 per dollar against the previous close of 75.35.

In intraday trade, the rupee saw a high of 74.83 to the dollar and a low of 75.1350.

Dollar index falls

IFA Global, in a report, observed that the rupee rose against the dollar because the dollar index remained weak and risk sentiment improved with a rise in equities globally.

“The dollar weakened because rising inflation amid a surge in energy prices in global economies is expected to push central bankers for a quick monetary policy tightening that may outpace the US Fed’s. Brent crude oil prices eased a bit and fell below the $85-per-barrel mark, which provided further relief to the domestic currency,” the report said.

However, a sharp rise in the yield on the 10-year benchmark US Treasury note limited any sharp gains in the rupee.

Anindya Banerjee, DVP, Kotak Securities, noted that the rupee appreciated on the back of a sharp rally in Chinese currency and fall in the US Dollar index.

“With oil prices holding steady at around 85 dollars a barrel, rupee has become a major underperformer in the Asian basket. There is scope for the currency to gain further ground, especially if the US Dollar index remains weak and global equity markets maintain the risk on-trend,” Banerjee said.