Rupee trades higher against US Dollar tracking domestic market

The Indian rupee gained momentum against US Dollar on Wednesday amid foreign fund inflows and gains in domestic equities. The currency opened higher by 2 paise at 82/$ at the interbank foreign exchange market and moved in a tight range of 82.01/$ to 81.97/$ in early trade.

On the economic front, India's current account deficit for the March quarter of FY23 narrowed, accompanied by a moderation in the trade deficit. The Reserve Bank of India (RBI) released data showing that India's current account deficit (CAD) for the fourth quarter of FY22-23 stood at $1.3 billion, equivalent to 0.2 percent of the GDP. This was a significant reduction from the preceding quarter's $16.8 billion (2 percent of the GDP) and the previous year's $13.4 billion (1.6 percent of the GDP). 

Meanwhile, Asian currencies experienced mixed trading, with some gaining and others losing ground. 

The dollar index, which measures the strength of the US dollar against major currencies, was trading at 102.605, showing a 0.11 percent increase from its previous closing value of 102.49. Despite hawkish signals from European Central Bank President Christine Lagarde, who stated that Euro-zone interest rates would not peak as long as inflation remains persistent, the dollar index remained above 102.20.

Source: Media reports