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| Photo Credit: Getty Images/iStockphoto

At the interbank foreign exchange, the rupee opened at 88.80, registering a decline of 7 paise over its previous close. File.
| Photo Credit: Reuters

Image used for representational purpose.
| Photo Credit: Reuters

The rupee extended its slide for the second straight session and declined 13 paise to hit a fresh record low of 85.87 (provisional) against the U.S. dollar on Wednesday (January 8, 2025) amid higher crude oil prices and stronger American currency.

Lacklustre sentiment in domestic equity markets and sustained outflow of foreign funds also played spoilsport even as investors stayed cautious over lower economic growth projection by the government, forex analysts said.

At the interbank foreign exchange, the rupee opened at 85.82 and touched the lowest-ever level of 85.89 against the greenback during intra-day. The unit settled at 85.87 (provisional) against the dollar, 13 paise lower than its previous close.

On Tuesday, the rupee settled with a loss of 6 paise at 85.74 against the dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.35 per cent higher at 108.76.

The 10-year U.S. bond yields also remained elevated at 4.67 per cent amid expectations of delayed interest rate cuts by the Federal Reserve.

Brent crude, the global oil benchmark, climbed 0.90% to $77.74 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex skid 50.62 points, or 0.06%, to settle at 78,148.49 points, while the Nifty fell 18.95 points, or 0.08%, to 23,688.95 points.

Foreign institutional investors (FIIs) offloaded ₹1,491.46 crore in the capital markets on a net basis on Tuesday, according to exchange data.

The latest government data released on Tuesday showed India’s economic growth rate is estimated to slip to a four-year low of 6.4% in 2024-25 due to poor show by the manufacturing and services sectors.

The gross domestic product (GDP) growth at 6.4% will be the lowest since the Covid year (2020-21) when the country witnessed a negative growth of 5.8%. It was 8.2% in the last fiscal year ended March 2024.

The first advance estimates of the national income for 2024-25 released by the National Statistics Office (NSO) is lower than the 6.6% projected by the Reserve Bank in December 2024.

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| Photo Credit: Reuters

The rupee consolidated in a narrow range and settled for the day higher by 1 paisa at 84.90 (provisional) against the U.S. dollar on Tuesday (December 17, 2024), weighed down by disappointing trade balance data and weak domestic markets.

Forex traders said the rupee is likely to remain under pressure due to concerns over slowdown in the economy and dollar demand from importers and foreign banks.

At the interbank foreign exchange, the rupee opened at 84.89 and touched an all-time low of 84.93 against the greenback during intra-day trade.

The unit finally ended the session marginally higher by 1 paisa at 84.90 (provisional) against the dollar.

On Monday, the rupee depreciated 11 paise to close at an all-time low of 84.91 against the U.S. dollar.

“We expect the rupee to trade with a negative bias on weak domestic markets and concerns over slowdown in the economy. A strong US dollar and FII outflows may further weigh on the rupee,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

On the domestic macroeconomic front, India’s exports in November contracted 4.85% year-on-year to $32.11 billion, while the trade deficit widened to an all-time high of $37.84 billion due to a record surge in gold imports.

The country’s gold imports in November reached a record high of $14.86 billion, registering a four-fold increase, mainly on account of festival and wedding demands, according to commerce ministry data.

Gold imports stood at $3.44 billion in November 2023.

“Traders may take cues from retail sales and industrial production data from the US. Investors may watch out for the Federal Open Market Committee (FOMC) meeting decision later this week. USDINR spot price is expected to trade in a range of 84.75 to 85.15,” Mr. Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.17% at 107.03.

Brent crude, the global oil benchmark, fell 0.49% to $73.55 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex closed lower by 1,064.12 points, or 1.30%, at 80,684.45 points. The Nifty was down 332.25 points, or 1.35%, to 24,336.00 points.

Foreign Institutional Investors (FIIs) offloaded ₹278.70 crore in the capital markets on a net basis on Monday, according to exchange data.

Image used for representational purpose.
| Photo Credit: Reuters

Rupee opened on a flat note and rose just 4 paise from its all-time low level to 84.71 against the U.S. dollar in morning trade on Thursday (December 5, 2024), as the support from positive domestic equities was negated by the broad strength of the American currency in the overseas market.

Forex traders said rupee is likely to remain under pressure in the near-term amid strong dollar and elevated in crude oil prices.

At the interbank foreign exchange, the rupee opened at 84.72 and moved in a tight range and touched 84.71 against the greenback, registering a gain of just 4 paise over its previous close.

On Wednesday, the rupee slumped by 7 paise to hits its lowest-ever closing level of 84.75 against the U.S. dollar.

“The upcoming RBI monetary policy meeting on December 6 will be pivotal, as a balanced stance on inflation and growth could further enhance sentiment and attract fresh inflows,” CR Forex Advisors’ Amit Pabari said.

The Reserve Bank’s high-level panel on Wednesday started deliberations on the bi-monthly monetary policy amid expectations of status quo on interest rate as the retail inflation is above the upper tolerance level of the Central bank.

The decision taken by the RBI Governor Shaktikanāta Das headed six-member Monetary Policy Committee (MPC) will be announced on Friday (December 6).

Looking ahead, the US Fed’s anticipated pivot towards rate cuts in 2025 could further improve the appeal of emerging markets like India. Moreover, this, combined with stabilizing FII flows, could ease liquidity constraints and enable the RBI to step up its forex market interventions, Mr. Pabari added.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.05% at 106.26.

Brent crude, the global oil benchmark, rose by 0.10% to $72.38 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex was trading 49.20 points, or 0.06% higher, to 81,005.53 points. The Nifty rose 47.85 points, or 0.2%, to 24,515.30 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday, as they purchased shares worth ₹1,797.60 crore, according to exchange data.

The rupee may depreciate 8-10% against the U.S.. dollar during the Trump 2.0 regime, said a SBI research report, even as the local currency hit its all-time low on Monday (November 11, 2024).

The report, titled U.S. Presidential Election 2024: How Trump 2.0 Impacts India’s and Global Economy, emphasised that the rupee can have a brief spell of depreciation against the U.S. dollar, followed by appreciation.

Also read | What’s at stake for global markets in a Trump presidency

Donald J Trump’s historical comeback as the 47th President of the United States adds a morphine shot to the markets and select asset classes even as the focus is now shifting to wider economic ramifications and supply chain realignments, the report said.

“Trump’s victory introduces a mix of challenges and opportunities for India. While the potential for increased tariffs, H-1B restrictions, and a strong dollar could bring short-term volatility…But it also presents India with long-term incentives to expand its manufacturing, diversify export markets, and enhance economic self-reliance,” it added.

It further said the 10-year yield shows no obvious trends, and the effect will be context-sensitive, going ahead.

“USD/INR has shown range bound movement, and the rupee can have a brief spell of depreciation followed by appreciation…Volatility in Indian equity markets showing signs of reduction,” the SBI’s study said.

Declining for the fourth straight session, the rupee dropped 2 paise to hit a new lifetime low of 84.39 (provisional) against the US dollar on Monday, weighed down by persistent foreign fund outflows and a muted trend in domestic equities.

Forex traders said the rupee is likely to remain under pressure unless there is a softening in the dollar index or a slowdown in foreign fund outflows.

The report emphasised that “the fear” that the rupee will depreciate sharply is unfounded.

During the Trump 1.0, it said, the rupee depreciated by 11 per cent, less than it depreciated during the Joe Biden term.

While a stronger dollar might result in short-term capital outflows for short-term as investors flock to dollar-based assets, on a positive note, a lower rupee might provide an export advantage, potentially boosting revenues in sectors like textiles, manufacturing, and agriculture, the research report said.

“Still, we expect a depreciation of 8-10 per cent during Trump 2.0,” the SBI research report said.

It also noted that the depreciation of the rupee may increase the import cost of oil and other commodities.

“As per our estimate, a 5 per cent decline in rupee will increase inflation by 25-30 bps. So, the impact will be very less on inflation,” it said.

According to the report, India may see shifts in foreign direct investments (FDIs) during Trump 2.0. The Trump 1.0 administration saw significant regulatory changes aimed at attracting investments back to the US, and this was reflected in data also.

“However, India is no longer dependent on the traditional sources of FDI inflows… unlike the recent past, FDI is now coming in many new sectors like non-conventional energy, sea transport, medical and surgical appliances, etc,” it said.

This trend could continue, thus offsetting the possibility of a decline in FDI flows in traditional sectors in Trump 2.0, if any.

The SBI report further said if the Trump administration opts to limit work visas, particularly the H-1B visa programme, Indian IT and ITeS sectors may see increased costs.

H-1B visa restrictions can lead to decreased labour mobility, affecting the hiring capabilities of Indian IT companies operating in the US.

This, the report said, may result in Indian firms to allocate resources towards hiring locally in the US at a higher cost, which could strain margins for companies.

During Trump 1.0 the non-immigrant visas issued by the U.S. largely stagnated around 10 lakh per year. However, in 2023, about 14 lakh Indians received non-immigrant visas, the report said.

Image used for representational purpose.
| Photo Credit: Reuters

Rupee depreciated 4 paise to close at 84.09 (provisional) against U.S. dollar on Wednesday (October 30, 2024), weighed down by weak domestic markets and month-end dollar demand from importers.

Forex traders said suspected intervention by the Reserve Bank of India (RBI) supported the local currency at lower levels.

At the interbank foreign exchange, the rupee opened at 84.06 against the greenback. It traded in a tight range and ended the day at 84.09 (provisional), down 4 paise from its previous close.

On Tuesday, the rupee gained 2 paise to settle at 84.05 against the U.S. dollar.

The local currency has been hovering around its all-time low level. Rupee touched its lowest closing level of 84.10 against the dollar on October 11.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.15% lower at 104.16. Forex traders said the dollar declined on disappointing jobs data from the U.S.

Brent crude, the global oil benchmark, rose 0.53% to $71.50 per barrel in futures trade.

“We expect the rupee to trade with a mixed to negative bias on weak domestic markets and sustained FII outflows. Month-end dollar demand from importers may further weigh on the rupee.

“However, softening of U.S. dollar amid disappointing jobs markets may support the rupee at lower levels. Traders may watch out for Q3 2024 GDP data and non-farm payrolls report from the U.S. this week,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

On the domestic equity market front, Sensex declined 426.85 points, or 0.53%, to 79,942.18 points. The Nifty fell 126.00 points, or 0.51%, to 24,340.85 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth ₹548.69 crore, according to exchange data.

Forex traders said the rupee is hovering around record low levels as the strong dollar weighed on the local unit.
| Photo Credit: REUTERS

The rupee settled flat at 84.07 (provisional) against the U.S. dollar on Tuesday, as the support from positive domestic markets and a softening crude oil prices was negated by persistent foreign fund outflows.

Forex traders said the rupee is hovering around record low levels as the strong dollar weighed on the local unit, while positive domestic equities, weak crude oil prices and suspected intervention by the Reserve Bank of India (RBI) supported the local currency at lower levels.

At the interbank foreign exchange, the rupee opened at 84.08 against the greenback. It traded in a tight range and ended the day at 84.07 (provisional), unchanged from its previous close.

On Monday, the rupee settled 1 paisa higher at 84.07 against the U.S. dollar.

The local currency touched its lowest closing level of 84.10 against the dollar on October 11.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.04% lower at 104.27.

According to traders, the rupee remains under intense pressure, mainly due to persistent foreign fund outflows. However, decline in crude price has helped ease pressure on the rupee despite ongoing market challenges.

Brent crude, the global oil benchmark, rose 0.74% to $71.95 per barrel in futures trade.

On the domestic equity market front, Sensex advanced 363.99 points, or 0.45%, to 80,369.03 points. The Nifty rose 127.70 points, or 0.52%, to 24,466.85 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday, as they offloaded shares worth ₹3,228.08 crore, according to exchange data.

Image used for representational purpose.
| Photo Credit: Reuters

The rupee pared its initial gains and settled on a flat note at 83.99 against the U.S. dollar on Monday (October 7, 2024) on selling pressure from foreign funds and weak tone in the domestic markets.

Forex traders said elevated crude oil prices and escalating tensions between Israel and Iran weighed on the local unit, while all-time high forex reserves boosted investor sentiments.

At the interbank foreign exchange, the rupee opened at 83.96 against the U.S. dollar and touched an intra-day high of 83.95 and a low of 83.99.

The domestic currency finally ended the day at 83.99 (provisional), unchanged from its previous closing level.

“We expect the rupee to trade with a negative bias on selling pressure from foreign funds and weak tone in the domestic markets. Escalating tensions between Israel and Iran may further pressurise the rupee,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

Mr. Choudhary said traders may take cues from comments by U.S. Fed officials.

“Investors may remain cautious ahead of the RBI’s monetary policy meeting outcome on Wednesday,” he said, adding that USDINR spot price is expected to trade in a range of ₹83.80-84.20.

Meanwhile, India’s forex reserves jumped $12.588 billion to a new all-time high of $704.885 billion for the week ended September 27, the Reserve Bank of India (RBI) said on Friday.

On the domestic equity market front, the Sensex fell 638.45 points, or 0.78%, to close at 81,050.00. The Nifty declined 218.85 points, or 0.87% to settle at 24,795.75. Both indices suffered losses in the previous week.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.07% to 102.59.

Brent crude, the international benchmark, advanced 2.09% to $79.68 in futures trade.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, offloading shares worth ₹9,896.95 crore on a net basis in the cash segment, according to exchange data.

Image used for representative purpose only. File
| Photo Credit: REUTERS

Rupee depreciated 11 paise to settle at 83.80 (provisional) against the U.S. dollar on Monday (September 30, 2024) taking cues from equity markets that saw a steep fall of over 1% amid volatile crude oil prices and outflow of foreign funds.

However, a weak greenback against major currencies supported the local unit, Forex traders said, while investors showed muted participation awaiting cues from domestic macroeconomic data to be released this week.

At the same time, they said, monetary and fiscal stimulus announced by China triggered withdrawal of foreign funds as investors preferred better-performing Chinese markets.

At the interbank foreign exchange, the local unit opened at 83.72 and hit the intra-day low of 83.81 against the greenback during the session. The unit finally settled at 83.80 (provisional) against dollar, registering a loss of 11 paise from its previous closing level.

On Friday (September 27, 2024) the rupee fell 3 paise to settle at 83.69 against the American currency.

Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said the rupee declined on weak domestic markets.

“Weaker than expected core personal consumption expenditures (PCE) price index and personal income data from the US also weighed on the dollar and raised optimism on rate cuts by the Fed,” he said, adding that rupee is expected to trade with a slight negative bias amid volatile crude oil prices on the back of the escalation of geopolitical tensions in the Middle East.

“Traders may take cues from India’s fiscal deficit and current account deficit data. Investors may watch out for ISM manufacturing PMI and non-farm payrolls report from the US this week. USD-INR spot price is expected to trade in a range of Rs 83.60 to Rs 84,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.12% to 99.99.

According to analysts, the U.S. core PCE price index for August showed a lower-than-expected rise, firming hopes of further interest rate cut by the Federal Reserve.

Brent crude, the international benchmark, declined by 0.24% to 71.81 in futures trade.

On the domestic equity market front, the Sensex tumbled 1,272.07 points or 1.49% to settle at 84,299.78, while the Nifty tanked 368.10 points or 1.41% to close the session at 25,810.85.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday (September 27, 2024) offloading shares worth ₹ 1,209.10 crore, according to exchange data.

Meanwhile, India’s Forex reserves jumped by $2.838 billion to a new all-time high of $692.296 billion for the week ended September 20, the RBI said on Friday (September 27, 2024). The overall kitty had increased by $223 million to a new high of $689.458 billion for the previous reporting week.