Following Asian markets, the Indian rupee rose against the U.S. dollar on Wednesday, but importer-led dollar buying erased gains.
After opening at 82.31, the rupee traded at 82.45 per dollar by 10:50 a.m. IST, up from 82.49.
Two dealers said they watched the 82.50 level as state-run banks bought dollars for oil marketing companies and importers, reversing initial gains. In addition, traders reported fixing-related dollar demand.
“A breakout over 82.50 amid speculative buying can drive the USD/INR pair towards 83.00 levels,” said CR Forex Advisors managing director Amit Pabari, adding that their overall bias was up.
Wall Street rallied overnight to end a three-day losing streak due to Silicon Valley Bank (SVB) worries. Asian currencies and shares climbed.
U.S. inflation figures met estimates, boosting risk appetite.
After rising 0.5% in January, the U.S. CPI increased 0.4% in February. CPI rose 6.0% from January to February, down from 6.4%.
The report increased the probability of a minor U.S. Federal Reserve rate hike next week. After the SVB debacle, Goldman Sachs economists suggested a halt.
Futures predicted a near-80% rate hike after the data.
Later in the day, India’s February trade figures will be watched.
