The rupee rose early on Wednesday, tracking a widespread rally in riskier assets in hopes of ending Russia-Ukraine conflict negotiations, even as oil prices rose amid supply concerns.
Most global equity markets reacted positively to Russia’s promise to reduce its military operations near Kyiv and surrounding cities, however, on the ground, reports of attacks continued, with Asian stocks joining the rally early Wednesday.
Domestic exchanges opened in the green following positive news from the latest peace talks in Istanbul more than a month after the most significant attacks on European countries since World War II.
But oil prices due to a fall in American crude oil reserves put the focus back on supply shocks.
Still, the rupee rose more than 0.5 percent to trade at 75.59 per dollar after opening at 75.979 against the U.S. dollar, as quoted by Reuters.
While PTI reported the rupee opened strong at 75.65 against the US dollar in interbank foreign exchange but lost little basis to quote at 75.69, a 4 paise rise over the last close. It moved in the near range of 75.69 and 75.62 in morning trade. The rupee had settled at 75.73 against the US dollar in the previous session.
The dollar index, which measures the strength of the U.S. dollar against a basket of six currencies, slipped 0.24 percent to 98.20.
While a weaker US dollar helped the energy -sensitive rupee, higher crude oil prices constrained its appeal.
However, a reversal in capital outflows is likely for the currency to make a profit.
In fact, stock exchange data showed foreign institutional investors (FII) were net buyers in the capital market on Tuesday as they bought shares worth Rs 35.47 crore.