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| Photo Credit: Reuters

The rupee depreciated 16 paise to close at 86.56 (provisional) against the U.S. dollar on Thursday (January 16, 2025), dragged down by a strong American currency overseas, elevated crude oil prices and foreign fund outflows.

“However, positive domestic equity markets provided some cushion at the lower level,” forex traders said.

At the interbank foreign exchange, the rupee opened at 86.42 and touched the intraday high of 86.37 before ending the session at 86.56 (provisional) against the greenback, 16 paise lower from the previous close.

The local unit settled with a gain of 13 paise at 86.40 against the dollar on Wednesday (January 15, 2025), a day after rebounding 17 paise from its lowest-ever level.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee declined due to increased demand for dollars by importers.

“Importers may continue to buy dollars, which may further pressurise the rupee. Traders may take cues from retail sales and weekly unemployment claims data from the US. USD-INR spot price is expected to trade in a range of ₹86.35 to ₹86.75,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05% higher at 108.97.

Brent crude, the global oil benchmark, fell 0.12% but stayed elevated at ₹81.93 per barrel in futures trade.

Analysts said concerns over geopolitical uncertainties will likely add volatility in the dollar and crude until the U.S. gets a new administration under President Donald Trump next week.

In the domestic equity market, the 30-share BSE Sensex climbed 318.74 points, or 0.42%, to settle at 77,042.82 points, while the Nifty rose 98.60 points, or 0.42%, to 23,311.80 points.

Foreign institutional investors (FIIs) offloaded equities worth ₹4,533.49 crore on Wednesday (January 15, 2025).

Photo used for representation purpose only.
| Photo Credit: Reuters

The rupee settled flat at 84.07 (provisional) against the US dollar for the second straight session on Tuesday (October 22, 2024), tracking negative domestic equity markets and unabated outflow of foreign funds.

The local unit was also weighed down by elevated crude oil prices as well as firm American currency amid rising U.S. treasury yields, forex traders said.

At the interbank foreign exchange market, the domestic unit opened at 84.07 against the greenback and witnessed a restricted movement between 84.06 and 84.08 during the session. The unit finally settled at the previous day’s closing level of 84.07 (provisional) against the dollar.

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

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

According to analysts, the rupee has been under pressure due to the continuous selling of Indian equities by FIIs in pursuit of better gains from the Chinese market.

Also, they said, a surge in the US treasury yields raised concerns about slower rate cuts by the Federal Reserve, steering investors towards a safer bet dollar.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee traded on a flat note amid weak domestic markets and a surge in US treasury yields. However, reports of RBI interventions supported the rupee at lower levels.

“Investors may take cues from PMI data from the US this week. USD-INR spot price is expected to trade in a range of ₹83.90 to ₹84.30,” he added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell marginally by 0.07 per cent to 103.76.