Representational image
| Photo Credit: REUTERS

The rupee stayed in a straightjacket for yet another week, trading at its near all-time low of 84.07 against the US dollar on Friday (October 25, 2024) amid firm American currency and unprecedented foreign fund outflow.

Forex traders said, the indication of some recovery in domestic equity markets prevented the fall in the local unit.

At the interbank foreign exchange, the local currency opened at 84.07 against the greenback, trading flat at previous day’s closing level in initial deals.

On Thursday, the rupee had settled flat at 84.07 against the US dollar.

The local currency has been struggling to recover since October 11, when it closed at its lowest level of 84.10 against the dollar.

Analysts said the selling rush by foreign investors in pursuit of better gains from the Chinese market has been preventing the rupee’s recovery, while higher US treasury yields have triggered the fear of slower interest rate cut by the Federal Reserve.

Also, uncertain geopolitical scenario ahead of the US presidential election steered investors towards safe-haven bets, they added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was higher by 0.03 per cent at 103.95.

Brent crude, the international benchmark, climbed 0.24 per cent to USD 74.56 per barrel in futures trade.

On the domestic equity market front, Sensex rose 44.38 points, or 0.06 per cent, to 80,109.54 points. The Nifty inched up 27.35 points, or 0.11 per cent, to 24,426.75 points. Both the indices closed lower on Thursday, extending their slide for the fourth straight session.

Image used for representational purpose. V. Sudershan
| Photo Credit: V. Sudershan

The rupee paused its three-day downward move and settled flat at 83.25 (provisional) against the U.S. dollar on October 27, as the support from positive domestic equities was negated by surging crude oil prices.

Forex traders said the rupee consolidated in a narrow range as selling pressure from foreign equity investors continued to weigh on the Indian currency.

At the interbank foreign exchange market, the local unit opened at 83.24 and traded in a narrow range of 83.22 to 83.25 before settling flat at Thursday’s closing level of 83.25 (provisional) against the greenback.

The rupee has dropped 8 paise against the dollar on Thursday, the third consecutive day of fall. It had declined 4 paise on Monday, followed by a dip of 1 paisa on Wednesday.

Forex markets were closed on Tuesday on account of Dussehra.

According to analysts, the dollar retreated as the U.S. Treasury yields dropped from its record levels after the U.S. GDP data, durable goods sales orders as well as home sales numbers exceeded the estimated growth.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the dollar gained on robust economic data from the U.S.

“Dollar may strengthen on safe-haven demand on media reports that the U.S. military struck Iranian targets in Syria.

“However, the rise in risk appetite in global markets may support the rupee at lower levels. Traders may remain cautious ahead of core PCE price index and personal income data from the U.S. USD-INR spot price is expected to trade in a range of ₹82.90 to ₹83.60,” Mr. Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06% lower at 106.54 on Friday.

Global oil price benchmark Brent crude witnessed a sharp rise of 2.39% to $90.03 per barrel.

On the domestic equity market front, Sensex surged 634.65 points or 1.01% to settle at 63,782.80. The Nifty climbed 190.00 points or 1.01% to 19,047.25.

Foreign Institutional Investors sold equities worth ₹7,702.53 crore on Thursday, according to exchange data.