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The rupee extended its recovery for the second straight session and settled with a gain of 13 paise at 86.40 (provisional) against the U.S. dollar on Wednesday (January 15, 2025), tracking favourable cues from domestic equity markets and softening crude oil prices.
The American currency index also descended from a record peak, adding to the gaining momentum in the local unit, though it remained under pressure from continuous exit of foreign institutional investors, forex traders said.
At the interbank foreign exchange, the rupee opened at 86.50 and slipped to the intraday low of 86.55 against the greenback. It also touched A high of 86.28 before ending the session at 86.40 (provisional) against the dollar, registering a gain of 13 paise from its previous close.
On Tuesday (January 14, 2025), the rupee rebounded from its lowest-ever level and settled with a gain of 17 paise at 86.53 against the dollar.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee gained for the second consecutive session on weak US dollar and soft U.S. 10-year treasury yields. A pullback in the domestic equities and overnight decline in crude oil prices also favoured the rupee. However, FII outflows capped sharp gains.
Analysts attributed the weakening dollar to a lower-than-expected producer price index, as per the latest data released in the US.
Going ahead, Choudhary said the U.S. inflation is expected to remain elevated and it may lead to a recovery in the US dollar, which is likely to put pressure on the rupee.
“Traders may take cues from CPI data from U.S. and speeches from various Fed speakers today. USD-INR spot price is expected to trade in a range of ₹86.25 to ₹86.65,” he added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.22% lower at 108.87.
Brent crude, the global oil benchmark, rose 0.35% to $80.20 per barrel in futures trade.
In the domestic equity market, the 30-share BSE Sensex climbed 224.45 points, or 0.29%, to settle at 76,724.08 points, while the Nifty rose 37.15 points, or 0.16%, to 23,213.20 points.
Foreign institutional investors (FIIs) offloaded equities worth ₹8,132.26 crore on Tuesday (January 14, 2025).
Government data released on Tuesday (January 14, 2025) showed that wholesale price inflation rose to 2.37% in December 2024, led by a spike in manufactured products even though prices of food items eased.
Another data on Monday (January 14, 2025) showed retail inflation declined to a four-month low of 5.22% in December amid the easing of prices in the food basket, fuelling expectations that the Reserve Bank of India (RBI) will reduce the key interest rate in upcoming monetary policy review on February 7.
The inflation based on the Consumer Price Index (CPI) eased for the second month in a row after it breached the RBI’s upper tolerance level of 6% in October.
Published – January 15, 2025 04:58 pm IST
