Rupee recovers 15 paise to 75.37 on weak dollar, lower crude prices

The rupee on Wednesday rebounded by 15 paise to close at 75.37 against the US dollar following a rally in domestic equities and weak American currency in the overseas markets.

In addition, lower crude prices and a benign retail inflation in September also supported the rupee sentiment, forex dealers said.

At the interbank forex market, the rupee opened strong at 75.29 against the greenback. During the session, the domestic unit swung between 75.19 and 75.51.

On Tuesday, the rupee had closed at 75.52 against the dollar.

Retail inflation fell to a five-month low of 4.35 per cent in September from 7.27 per cent in the year-ago period as prices of vegetables and other items declined.

"India's CPI fell to a five-month low in September at 4.35 per cent, well within RBI's comfort zone of 2- 6 per cent, providing RBI scope to continue with its accommodative policy stance to achieve sustainable economic recovery," Kaynat Chainwala - Fundamental Research Analyst Currencies, Anand Rathi, said.

"Indian rupee appreciated amid weakness in dollar and rise in risk appetite in the domestic markets. Further, the rupee gained strength on improved macroeconomic data," Deepak Singh, Head-Derivatives - ICICI Securities, said.

However, sharp gains were prevented as investors remained vigilant ahead of the release of the FOMC meeting minutes and inflation data from the US. The rupee may trade in the range of 75.10 to 75.80 in the next couple of sessions, he added.

With investors keenly awaiting US retail sales, inflation and FOMC meeting minutes due this week, the dollar may trade range-bound between 94.2 and 94.6 and so the rupee is likely to swing back to 75.3 levels with a broader trading range of 75 75.5 for the coming sessions, he added.

"After US NFP, it is the CPI data and FOMC minutes that are in focus as it may offer more insight into when the Federal Reserve will reduce stimulus and raise interest rates. The USDINR spot has been quite volatile this week, surging to one-and-a-half year high, as event-specific risk is keeping it afloat..., Emkay Global Financial said in a note.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.27 per cent to 94.26.

Brent crude futures, the global oil benchmark, declined 0.40 per cent to USD 83.09 per barrel.

After scaling a record peak of 60,836.63 during the session, the BSE Sensex settled 452.74 points or 0.75 per cent higher at 60,737.05, taking its winning run to the fifth consecutive day.

Similarly, the Nifty rallied 169.80 points or 0.94 per cent to 18,161.75. It touched an intra-day record of 18,197.80.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth Rs 278.32 crore, as per exchange data.