MUMBAI: The Indian rupee gained on Thursday as exporters sold U.S. dollars and as crude oil prices shed most of the gains prompted by the military conflict in the Middle East.
The rupee was at 83.1450 against the dollar as of 10:25 a.m. IST compared with a close at 83.1875 in the previous session.
“Today, selling pressure is there (on USD/INR),” a foreign exchange trader at a state-run bank said. “The pair could test 83.10 levels.”
Investors awaited the U.S. inflation data which is expected to show that core consumer price inflation held steady at 0.3% month-on-month, according to a Reuters’ poll.
Even if U.S. inflation surprises to the upside, the rupee won’t fall below 83.25, the foreign exchange trader said, alluding to the Reserve Bank of India’s persistent defence of the local unit near that level.
The dollar index was little changed at 105.6, close to its lowest in two weeks, after minutes from the U.S. Federal Reserve’s showed that Fed officials adopted a more cautious stance in September in the face of growing economic uncertainty.
Brent crude oil futures were lower at $85.48 per barrel, after top OPEC producer Saudi Arabia pledged to help stabilise the market and as U.S. inventories rose more then expected.
Asian currencies were mostly rangebound but the Thai bhat was up 0.7%.
While exporters have been selling dollars, foreign flows are still negative, Anindya Banerjee, head of foreign exchange research at Kotak Securities, said, pointing to a pressure point for the rupee.
Overseas investors have sold $945 million of Indian equities in October, adding to the $1.77 billion of sales in September.
India will report its consumer inflation numbers on Thursday. Year-on-year retail inflation is expected to moderate to 5.5% in from 6.83%, according to a Reuters’ poll.