Rupee surges 17 paise against US dollar

Mumbai, Mar 13 (PTI) The rupee surged 17 paise to settle at 87.05 against the US dollar on Thursday following robust macroeconomic data and easing crude oil prices.

Besides, recent weakness in the US dollar index also supported the local currency, forex dealers said.

However, losses in domestic equities and unabated foreign capital outflows capped the sharp gain, they added.

At the interbank foreign exchange, the rupee opened at 87.13 and hit the intraday high of 86.94 against the greenback. The unit touched the day's low of 87.15 before ending the session at 87.05, up 17 paise against the previous closing level.

In the previous session on Wednesday, the rupee settled just 1 paisa lower at 87.22 against the US dollar.

The forex markets will remain closed on Friday for Holi.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee recovered on upbeat macroeconomic data and a soft US dollar. However, weak domestic markets capped sharp gains.

Choudhary further said that weak domestic markets, the ongoing trade tariff issue, and FII outflows may cap a sharp upside.

"Traders may take cues from PPI and weekly jobless claims data from the US. USD-INR spot price is expected to trade in a range of Rs 86.80 to Rs 87.25." Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.12 per cent at 103.70.

Brent crude, the global oil benchmark, traded 0.37 per cent lower at USD 70.69 per barrel in futures trade.

At the domestic equity market front, the BSE Sensex ended 200.85 points, or 0.27 per cent lower at 73,828.91, and the broader Nifty settled 73.30 points, or 0.33 per cent, down at 22,397.20 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 792.90 crore on a net basis on Thursday, according to exchange data.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said the rupee was supported by dollar weakness, which has seen a decline of more than 4 per cent in the last two weeks.

Also, he said the lower inflation data has fuelled expectations of a rate cut in the next RBI policy, further aiding rupee strength.

"With inflation on a downward trajectory, market participants anticipate a less restrictive monetary stance, which has provided a boost to rupee sentiment. The rupee range is expected between 86.60-87.30, with global dollar movement and domestic policy expectations continuing to drive momentum," he added.

The latest government data released on Wednesday showed India's Consumer Price Index (CPI)-based retail inflation slipped to a seven-month low of 3.61 per cent in February due to easing prices of vegetables, eggs, and other protein-rich items, creating space for the RBI to go for another cut in interest rate next month.

Another set of data released by the National Statistics Office (NSO) showed that the growth in the Index of Industrial Production (IIP), a measure of the performance of industries, accelerated to 5 per cent in January 2025, driven by a rebound in manufacturing activity.

On the global front, President Donald Trump has challenged US allies by increasing tariffs on all steel and aluminium imports to 25 per cent as he vowed to take back wealth "stolen" by other countries.

In a quick retaliation, Canada imposed stiff taxes on a range of US products from textiles and water heaters to beef and bourbon.

Meanwhile, the European Union (EU) has also said it will raise tariffs on American beef, poultry, bourbon, motorcycles, peanut butter and jeans. PTI HVA BAL BAL

Source: PTI