The rupee witnessed a range-bound trade and strengthened marginally by 4 paise to 84 (provisional) against the U.S. dollar on Wednesday (October 16, 2024) as easing crude oil prices supported investor sentiments.
| Photo Credit: Reuters

The rupee witnessed a range-bound trade and strengthened marginally by 4 paise to 84 (provisional) against the U.S. dollar on Wednesday (October 16, 2024) as easing crude oil prices supported investor sentiments.

Forex traders said the rupee traded in a narrow range as a strong dollar and a muted tone in the domestic equities weighed on the local unit, while weak crude oil prices and any likely intervention by the Reserve Bank of India (RBI) supported the local currency at lower levels.

At the interbank foreign exchange market, the local unit opened at 84.03 and traded in a narrow range of 83.98 and 84.07 and finally settled for the day at 84.00 (provisional), higher by 4 paisa over its previous close of 84.04 against the dollar.

“The local currency pair was weighed down by significant foreign fund outflows this month amid strength of the American currency in the overseas market which surged to a two-month high of 103.25.

“Overall Foreign Institutional Investors offloading $8 billion in October also weighed on sentiments for rupee in the current month,” said Maneesh Sharma, AVP – Commodities & Currencies, Anand Rathi Shares and Stock Brokers.

Analysts said investors are awaiting the U.S. retail sales and jobless claims reports, due on Thursday (October 17, 2024), for cues on the future path of U.S. policy rates which could provide crucial direction to dollar, while likely intervention by the Reserve Bank of India (RBI) could also support the local currency pair at lower levels.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was marginally down by 0.01% to 103.25 points.

Brent crude, the international benchmark, eased 0.31% to $74.02 per barrel in futures trade amid easing concerns about supply disruptions due to the Middle East conflict.

In the domestic equity market, the 30-share BSE Sensex declined 318.76 points, or 0.39%, to close at 81,501.36 points, while the Nifty was down 86.05 points, or 0.34%, to 24,971.30 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Tuesday (October 15, 2024), as they offloaded shares worth ₹1,748.71 crore, according to exchange data.

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| Photo Credit: istock.com

The rupee fell 2 paise to 83.81 against the U.S. dollar in early trade on Tuesday (October 1, 2024), tracking massive outflow of foreign funds amid volatile global markets.

Forex traders said a strengthening American currency weighed down the Indian unit against major rivals, though retreating crude oil prices and recovery in domestic equity markets resisted a steep fall in the rupee.

They said monetary and fiscal stimulus announced by China triggered the withdrawal of foreign funds as investors preferred better-performing Chinese markets.

At the interbank foreign exchange, the local unit opened at 83.81 against the greenback, registering a loss of 2 paise from its previous closing level.

On Monday (September 30), the rupee settled 10 paise lower at 83.79 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.02% to 100.54.

Brent crude, the international benchmark, declined 0.29% to 71.77 in futures trade.

On the domestic equity market front, the Sensex climbed 251.03 points or 0.30% to 84,550.81, while the Nifty rose 63.40 points or 0.25% to 25,874.25. Both the indices tumbled nearly 1.5% on Monday (September 30).

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Monday (September 30), offloading shares worth ₹9,791.93 crore, according to exchange data.

Meanwhile, official data released on Monday (September 30) showed that the government’s fiscal deficit — the gap between expenditure and revenue — at the end of the first five months of the current financial year touched 27% of the full-year target.

Also, the Reserve Bank data released on Monday (September 30) showed the country’s current account deficit widened marginally to $9.7 billion or 1.1% of GDP in April-June 2024, as against $8.9 billion or 1% in the year-ago period.