Rupee rebounds 13 paise to 83.27 against U.S. dollar in early trade

Rupee rebounds 13 paise to 83.27 against US dollar as US Fed signals rate cut.

The rupee rebounded by 13 paise to 83.27 against the U.S. dollar in early trade on Thursday after the greenback weakened in the overseas markets as the U.S. Federal Reserve signalled a cut in interest rates next year.

The local unit opened strong at 83.30 at the interbank foreign exchange market. The currency rose further to hit a high of 83.27 in morning deals, reflecting gains of 13 paise over the previous close.

The rupee had closed at its all-time low level of 83.40 on Wednesday after retail inflation rose to a three-month high of 5.55 per cent in November.

The U.S. dollar index, which measures the greenback's strength against a basket of six currencies, eased by 0.33 per cent to 102.53.

The U.S. Federal Reserve kept its key interest rate unchanged on Wednesday for a third time in a row. The officials also signalled that they expect to make three quarter-point cuts to their benchmark rate next year.

"The crash in the U.S. 10-year yield to 4 per cent will trigger large capital flows to India. The main beneficiaries will be the large caps, particularly the fairly valued large caps in banking. IT too is likely to attract buying," V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.

Brent crude futures, the global oil benchmark, rose 0.28 per cent to $74.47 per barrel.