Rupee strengthens against US dollar on firm domestic equities

Indian rupee strengthened against the US dollar on Wednesday due to firm domestic equities following the latest data from IHS Markit India showing that the manufacturing sector in the country continued its strong expansion in November as sales accelerated and production saw the fastest upturn in 9 months. While, India's gross domestic product in the second quarter of the fiscal year 2021-22 grew at 8.4 percent. Further, weakness in American currency overseas markets also supported investor sentiments. However, some gains were capped by concerns over the fresh impact of the new coronavirus variant on the global economy. Meanwhile, Foreign Institutional Investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 5,445.25 crore on Tuesday, exchange data showed. On the global front, the safe-haven Japanese yen held steady after the US Federal Reserve Chair Jerome Powell signalled a faster taper its massive stimulus program despite the uncertainties around the Omicron variant of coronavirus.

The partially convertible currency is currently trading at 74.88, stronger by 25 paise from its previous close of 75.13 on Tuesday. The currency touched a high and low of 74.9625 and 74.7950 respectively