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The Indian rupee jumped by 43 paise to close at 81.92 per dollar which is the highest in over a month. The currency has gained 1.2 per cent over the past two sessions even as other Asian currencies except the Chinese yuan extended their gains.
The dollar index lost steam to trip 0.3 per cent to 110.40. However, experts said the rise in oil prices and any upside surprises on the United States inflation later in the week might strengthen the greenback. Oil prices were at $98.33 per barrel, hovering dangerously close to the $100-level.
FPIs turn saviours
For now though, the Indian currency is finding buoyancy with the foreign portfolio investors (FPIs) turning net buyers in Indian markets during the first week of November. FPIs have pumped in ₹16,878 crore into the Indian equity market so far in November.
Sriram Iyer, Senior Research Analyst at Reliance Securities said in a note, “Looking ahead, we see the Rupee in a trading band in November. Most of the negative news and hawkish Fed to an extent has been factored in. Additionally, direct aggressive intervention from the RBI can be expected if Rupee breaks the comfort zone of the Central bank. Moreover, the Central bank will continue to do buy/sell swaps to stabilise the currency. So, for the rest of the month of November, the Rupee could remain within a trading band of 81.25 to 83.25. However, by December end, Rupee’s weakness could remain intact and could test 84.00 levels.”
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