On Friday, the rupee rebounded from its all-time low level and settled with a gain of 8 paise at 84.80 against the U.S. dollar. File.
| Photo Credit: Reuters
The rupee depreciated by 9 paise to close at an all-time low level of 84.89 (provisional) against the U.S. dollar on Monday (December 16, 2024), dragged down by a negative trend in domestic equities.
Forex traders said the Indian rupee declined on weak domestic markets and rising U.S. bond yields. However, a soft U.S. dollar cushioned the downside.
At the interbank foreign exchange, the rupee opened at 84.83 and touched 84.89 against the greenback during intraday trade. The unit finally ended the session 9 paise down at 84.89 (provisional) against the dollar.
On Friday, the rupee rebounded from its all-time low level and settled with a gain of 8 paise at 84.80 against the U.S. dollar.
The unit’s previous all-time low level was recorded on December 12 when it closed at 84.88 against dollar.
“We expect the rupee to trade with a negative bias on rising odds of a rate cut by the Federal Open Market Committee (FOMC) and weak tone in the domestic markets. Elevated crude oil prices may also weigh on the rupee,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.
However, FII inflows and cooling off of inflation may support the rupee at lower levels.
On the domestic macroeconomic front, wholesale price-based inflation declined to a 3-month low of 1.89 per cent in November on cheaper food items.
Retail inflation declined in November to 5.48% and came within the Reserve Bank’s comfort zone mainly due to easing food prices, creating headroom for a rate cut at the central bank’s rate-setting panel meeting under new Governor Sanjay Malhotra in February.
“Traders may take cues from PMI and Empire State Manufacturing Index data from the US. Investors may watch out for the FOMC meeting decision later this week. USD-INR spot price is expected to trade in a range of 84.65 to 85.05,” Choudhary added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally lower by 0.14% at 106.85.
Brent crude, the global oil benchmark, fell 0.78% to $73.91 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex closed lower by 384.55 points or 0.47% at 81,748.57 points. The Nifty was down 100.05 points, or 0.4%, to 24,668.25 points.
Foreign Institutional Investors (FIIs) purchased ₹2,335.32 crore in the capital markets on net basis on Friday, according to exchange data.
Meanwhile, India’s forex reserves dropped by $3.235 billion to $654.857 billion for the week ended December 6, the RBI said on Friday.
In the preceding week, the reserves had increased by $1.51 billion to $658.091 billion, ending a multi-week decline in the overall kitty.
Published – December 16, 2024 04:32 pm IST
