Rupee rises 3 paise to close at 95.25 against US dollar

     New Delhi, Oct 29 (PTI) The rupee consolidated in a narrow range and rose 3 paise to close at 95.25 (provisional) against the US dollar on Thursday, supported by positive domestic markets and softening crude oil prices.

     Forex traders said the rupee fell to a two-week low on a strong dollar and a slightly hawkish Fed. However, positive domestic markets and softening of crude oil prices cushioned the downside.

     In the interbank foreign exchange market, the rupee opened at 95.20 against the dollar, then lost ground to touch an intra-day low of 95.38 and finally settled for the day at 95.25 (provisional), registering a gain of 3 paise over its previous close.

     On Wednesday, the rupee depreciated 21 paise to close at 95.28 against the US dollar.

     "We expect the rupee to trade with a slight negative bias on a hawkish Fed and a strong dollar. Expectations of a rate hike by the Fed in December may further strengthen the dollar," said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

     However, softening of crude oil prices and optimism over diplomatic talks between the US and Iran may also support the rupee at lower levels.

     "Traders may take cues from GDP and core PCE price index data from the US. Investors will also watch out for the ECB's monetary policy. USD-INR spot price is expected to trade in a range of 94.5 to 95.50," Choudhary added.

     Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.07 per cent at 102.26.

     Brent crude, the global oil benchmark, was trading lower by 1.03 per cent at USD 114.13 per barrel in futures trade.

     The US Fed kept interest rates unchanged at 3.75 per cent–4.00 per cent as widely expected, but the market reaction turned mildly dollar-negative, forex traders said.

     The Fed's pause has left markets highly sensitive to incoming data: stronger inflation could reinforce expectations of a rate hike in December, while softer numbers could offer relief to bullion and emerging-market currencies.

     On the domestic equity market front, Sensex jumped 905.01 points to settle at 74,151.04, while the Nifty surged 237.90 points to 22,936.75.

     Foreign Institutional Investors (FIIs) bought equities worth Rs 871.83 crore on a net basis on Wednesday, according to exchange data.

(This story has not been edited by THE WEEK and is auto-generated from PTI)