Mumbai

Therupee pared initial gains and settled for the day with gains of just 3 paise at 95.70 against the US dollar, as the support from the weaker dollar index was negated by elevated crude oil prices. Forex traders said while a weaker US dollar eases some depreciation pressure on the domestic currency, crude oil hovering above $90 would continue to keep pressure on India’s import bill.

The dollar index fell to its lowest level since late May after the US Treasury announced that it would double its buyback operations for longer-dated Treasury bonds, pushing US long-term yields lower and reducing the dollar’s yield advantage.

At the interbank foreign exchange, the rupee opened at 95.57 against the greenback and traded in a range of 95.56-95.72 during the session. It eventually settled at 95.70, higher by 3paise from its previous close. On Wednesday, the rupee stayed almost flat, ending just 1 paisa higher at 95.73 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 98.61, lower by 0.22 per cent. According to Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, the rupee opened higher on weak dollar and positive domestic markets. However, rupee pared initial gains on rising crude oil prices.