The rupee strengthens against the dollar, supported by a positive equities trend
| Photo Credit: The Hindu
The Rupee appreciated 8 paise to 83.89 against the U.S. dollar in early trade on Friday (August 9, 2024), supported by a positive trend in domestic equities and a decline in the U.S. dollar index.
Forex traders said that after the Reserve Bank of India’s monetary policy announcement, markets now await U.S. CPI data, India CPI, WPI and IIP data and India’s trade data, all scheduled to be released next week.
“The Jackson Holes Symposium to be held after next week will also remain in focus,” traders said.
At the interbank foreign exchange, the rupee opened at 83.95 against the greenback, then touched 83.89, registering a rise of 8 paise over its previous closing price.
On Thursday (August 8, 2024), the rupee consolidated in a narrow range and settled for the day lower by 2 paise at 83.97 against the U.S. dollar.
“The rupee was protected by the Reserve Bank of India (RBI) at 83.96 for this week and the local unit is likely to trade in a narrow range of 83.90/84.00 for the day after the RBI kept key benchmark rates on hold,” said Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03% lower at 103.17.
Brent crude, the global oil benchmark, advanced 0.15% to $79.28 per barrel. “Brent oil prices rose to $79.22, a 3% weekly gain, on rising Middle East tensions and better than expected U.S. jobless claims data, giving a better outlook on the U.S. economy,” Mr. Bhansali added.
Market analysts said while the rupee seems to be tilting towards a negative bias, sharp fluctuations are not anticipated.
Meanwhile, the Monetary Policy Committee (MPC) of the Reserve Bank kept the benchmark repurchase or repo rate unchanged at 6.50%. Announcing the bi-monthly monetary policy review RBI Governor Shaktikanta Das said, “The Indian rupee has remained largely range-bound so far this financial year.”
Mr. Das further noted that the country’s forex reserves touched a record high of $675 billion as of August 2.
On the domestic equity market front, Sensex surged 958.63 points, or 1.22%, to 79,844.85 points. The Nifty advanced 280.70 points, or 1.16%, to 24,397.70 points.
“Foreign institutional investors (FIIs) were net sellers in the capital markets on Thursday (August 8, 2024), as they offloaded shares worth ₹2,626.73 crore,” according to exchange data.
