Rupee rises by 6 paise to close at 87.07 against US dollar

Mumbai: Rupee pared initial losses and settled on a higher note at 87.07 (provisional) against the US dollar, up by 6 paise on the back of a rise in risk appetite in global markets.

Forex traders said easing tensions over trade tariffs and hopes of peace between Russia and Ukraine enthused investors. Moreover, the proposed GST reforms and a recent credit rating upgrade by a foreign agency have bolstered confidence in the Indian economy.

Rupee declined in the first half of the day on a positive US dollar and recovery in crude oil prices. However, the domestic currency recovered losses on gains in domestic stock markets and possible foreign fund inflows, traders added.

The local unit opened lower at 87.16 but later recovered losses to hit a high of 86.98 against the greenback, as GST rationalisation and easing worries over additional tariffs by the US supported investor sentiment.

At the interbank foreign exchange market, the rupee settled at 87.07 (provisional), registering a gain of 6 paise over its previous close. On Tuesday, the rupee appreciated 26 paise to close at 87.13 against the US dollar.

"We expect the rupee to trade with a positive bias on rise in risk appetite in the global markets amid easing tensions over trade tariffs and hopes of peace between Russia and Ukraine," said Anuj Chaudhary, Research Analyst, Commodities and Currencies, Mirae Asset Sharekhan.

Upbeat domestic market sentiments also supported the local unit.

"USDINR spot price is expected to trade in a range of 86.60 to 87.30," Chaudhary said.

Meanwhile, Brent crude, the global oil benchmark, was trading higher by 0.67 per cent at USD 66.23 per barrel in futures trade, amid cautious optimism around the Ukraine-Russia conflict.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was lower by 0.06 per cent at 98.20.

On the domestic equity market front, Sensex climbed 213.45 points to settle at 81,857.84, while the Nifty advanced 69.90 points to 25,050.55.

Foreign Institutional Investors offloaded equities worth Rs 634.26 crore on Tuesday, according to exchange data.

Meanwhile, US Treasury Secretary Scott Bessent on Tuesday accused India of “profiteering” by reselling Russian oil while sparing China for the same, saying it has “diversified inputs of their oil".

The remarks came amid strain in India-US relations after US President Donald Trump imposed tariffs totalling 50 per cent on India. This includes 25 per cent for New Delhi’s purchases of Russian oil that will come into effect from August 27.

He further said that this “Indian arbitrage, buying cheap oil and reselling it as a product, has just sprung up during the war …is just unacceptable."