Indian rupee rises 71 paise to 80.69 against US dollar

The rupee climbed 71 paise to 80.69 against the US dollar in early
trade on Friday, as softer-than-expected US CPI data coupled with the fall in
the dollar index boosted investor sentiments.

Factors like positive domestic stocks and weakness in crude
oil prices also supported the local unit, according to FX traders.

At the interbank foreign exchange, the local unit opened at
80.76 versus the dollar, then increased further to touch 80.69, recording a rise
of 71 paise over its previous close.

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The rupee rose 7 paise to close at 81.40 against the US
dollar on Thursday.

The dollar index, which measures the greenback’s strength
against a basket of six currencies, slipped 0.02% to 108.18 on easing US CPI
data.

According to report released by Department of Labor
Statistics, US headline CPI Inflation came in at 7.7% year-on-year and 0.4%
month-on-month. Core CPI figure which excludes the volatile food and energy prices
also came in lower at 6.3% year-on-year and 0.3% month-on-month.

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“We expect the dollar index to remain weak and could
test 105.00 levels in the short-term,” said Rahul Kalantri, VP of
Commodities, Mehta Equities Ltd.

“We expect the rupee could gain strength in today’s
session after a sharp fall in the dollar index and could test 80.80 levels in
upcoming sessions,” he added.

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Asian currencies rallied, with the Korean won rising nearly
2%. Hong Kong equities jumped 5%, matching the overnight rally on the S&P
500 index.

Brent crude futures, the international oil benchmark, surged
0.27% to USD 93.92 per barrel.

In the domestic equity market, the Sensex was trading
1021.78 points or 1.69% higher at 61,635.48. Similarly, the Nifty rose 282.70
points or 1.57% to 18,310.90.

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According to stock exchange data, foreign Institutional
Investors (FIIs) were net buyers in the capital markets on Thursday as they
purchased shares worth Rs 36.06 crore.