Rupee edges 6 paise higher at 68.89 against US dollar

Mumbai: The Indian rupee on Wednesday saw a marginal 6 paise gain at 68.89 against the US dollar in line with a steady trend in domestic equities in the run-up to the Union Budget due on Friday.

At the interbank foreign exchange, the domestic unit opened stronger at 68.83 and went on to touch the day's high of 68.79 to the US dollar. The local currency, however, failed to sustain the gain and slipped to a low of 68.96 in intra-day deals.

The domestic currency finally closed at 68.89 against the US dollar.

The rupee had settled at 68.95 against the US dollar on Tuesday.

Market participants are keenly awaiting the Union Budget, to be unveiled on Friday, which will give further cues in terms of policy measures, analysts said.

Meanwhile, weaker American currency against its key rivals also helped the rupee trade higher. However, rising crude oil prices and foreign fund outflows weighed on the domestic currency and restricted its rise.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell marginally by 0.03 per cent to 96.70.

Brent crude futures, the global oil benchmark, rose 1.04 per cent to trade at USD 63.05 per barrel.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 390.18 crore on Wednesday, as per provisional data.

Meanwhile, the 10-year government bond yield was at 6.83 per cent on Wednesday.

Equity benchmarks Sensex and Nifty ended modestly higher Wednesday. The 30-share BSE Sensex settled 22.77 points, or 0.06 per cent, higher at 39,839.25. Similarly, the broader NSE Nifty edged up 6.45 points, or 0.05 per cent, to 11,916.75.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 68.9924 and for rupee/euro at 77.9177. The reference rate for rupee/British pound was fixed at 87.2262 and for rupee/100 Japanese yen at 63.66.