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| Photo Credit: Reuters

The rupee depreciated 9 paise to close at 85.73 (provisional) against the U.S. dollar on Thursday (January 2, 2025), as strong dollar demand from importers and foreign fund outflows dented investor sentiments.

Forex traders said the dollar gained against most currencies during 2024 and continued to remain on a strong footing this year. Moreover, persistent foreign fund outflows further dented investors’ sentiments.

Additionally, global markets are expected to see low volumes as the holiday season is underway in major economies like those in Europe.

t the interbank foreign exchange, the rupee opened on a weak note and witnessed an intra-day low of 85.79 and a high of 85.68 against the American currency. The local unit settled for the day at 85.73 (provisional), registering a fall of 9 paise over its previous close amid a sharp recovery in domestic equities.

On Wednesday (January 1, 2024), the rupee settled flat at 85.64 against the U.S. dollar.

On December 27, the local currency touched its lifetime intra-day low of 85.80 against the greenback.

“We expect the rupee to trade with a negative bias on strength in the US Dollar and dollar demand from importers. Sustained FII outflows may further pressure the rupee,” said Anuj Choudhary — Research Analyst at Mirae Asset Sharekhan.

“However, any intervention by the Reserve Bank of India (RBI) may support the rupee at lower levels. USDINR spot price is expected to trade in a range of 85.50 to 86, Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02% lower at 108.46.

Brent crude, the global oil benchmark, rose 0.91% to $75.32 per barrel in futures trade.

Meanwhile, India’s manufacturing sector growth fell to a 12-month low in December, as new business orders and production expanded at softer rates, a monthly survey said on Thursday (January 2, 2025).

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index was at 56.4 in December, down from 56.5 in November, indicating a weaker improvement in operating conditions.

In the domestic equity market, the 30-share BSE Sensex settled at 1,436.30 points, or 1.83%, up at 79,943.71 points, while the Nifty was higher by 445.75 points, or 1.88%, to 24,188.65 points.

Foreign Institutional Investors (FIIs) offloaded ₹1,782.71 crore in the capital markets on a net basis on Wednesday (January 1, 2025), according to exchange data.

On the domestic macroeconomic front, the total gross goods and services tax (GST) revenue grew 7.3% to ₹1.77 lakh crore in December as compared to ₹1.65 lakh crore in the same month a year ago.

In November, GST mop-up was Rs 1.82 lakh crore with 8.5% annual growth. The highest-ever collection was in April 2024 at over ₹2.10 lakh crore.

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| Photo Credit: Reuters

The rupee dropped 9 paise to 85.61 against the U.S. dollar in early trade on Tuesday (December 31, 2024), weighed down by significant strengthening of the American currency in the overseas market and a muted trend in domestic equities.

Forex traders said the rupee has been under continued pressure amid the Federal Reserve’s cautious stance and the “Trump factor” driving up the dollar index (DXY) and US 10-year yields.

Additionally, on the domestic front, slowing growth, widening trade deficit, and persistent foreign fund outflows have further fueled the rupee’s depreciation.

At the interbank foreign exchange, the rupee opened on a weak note at 85.54 then fell further to 85.61 against the American currency, registering a fall of 9 paise over its previous close, on month-end dollar demand from importers and oil marketing companies.

On Monday (December 30, 2024), the rupee dropped 4 paise to 85.52 against the U.S. dollar.

According to Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP, the US Dollar stood tall in 2024 and recorded strong gains against most currencies, as investors braced for fewer US rate cuts and the incoming Trump administration’s policies.

“It would be posting strong gains in 2024 against most currencies and its gains have been buoyed by rising treasury yields, a falling yen and European currencies,” Mr. Bhansali said.

Mr. Bhansali further added that rupee is expected to remain volatile with Tuesday (December 31, 2024) being the last day of roll-over of positions.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.14% down at 107.97.

Brent crude, the global oil benchmark, was up 0.50% at $74.36 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 548.90 points or 0.70% down at 77,699.23 points in morning trade, while Nifty was down 138.90 points or 0.59% to 23,506.00 points.

Foreign Institutional Investors (FIIs) offloaded ₹1,893.16 crore in the capital markets on a net basis on Monday (December 30, 2024), according to exchange data.

On the domestic macroeconomic front, India’s current account deficit (CAD) moderated marginally to $11.2 billion or 1.2% of GDP year-on-year in the July-September quarter of 2024-25, according to Reserve Bank data released on Friday (December 27, 2024).

The CAD, an indicator of the country’s external payment scenario, was $11.3 billion or 1.3% of GDP during the second quarter of 2023-24.

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| Photo Credit: Reuters

The rupee depreciated by 4 paise to settle at an all-time low of 84.87 (provisional) against the U.S. dollar on Thursday (December 12, 2024), dragged down by negative domestic equity markets, outflow of foreign funds and rise in crude oil prices.

Forex traders said investors were awaiting cues from domestic inflation data to be released later in the day even as an elevated dollar index weighed on the Indian currency.

At the interbank foreign exchange, the rupee opened at 84.85 and touched the lowest-ever level of 84.88 against the greenback during intra-day trade. The unit finally ended the session 4 paise down at a fresh all-time low closing level of 84.87 (provisional) against the dollar.

On Wednesday (December 11, 2024), the rupee settled with a gain of 2 paise at 84.83 against the U.S. dollar.

Rupee’s previous record low closing level was recorded on December 9, when it settled 20 paise lower at 84.86 against the dollar.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee touched a fresh all-time low on strong U.S. dollar and weak domestic markets.

He further said the U.S. dollar gained on rising inflation in the US. However, it was in line with estimates.

“Surge in global crude oil prices may further pressurise the rupee. However, any intervention by the RBI may support the rupee at lower levels. Traders may take cues from PPI (producer price index) and weekly unemployment claims data from the U.S. USD-INR spot price is expected to trade in a range of 84.65 to 85.10,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally lower by 0.16% at 106.22.

Brent crude, the global oil benchmark, rose 0.35% to $73.78 per barrel in futures trade.

On the domestic equity market front, the 30-share benchmark index Sensex closed lower by 236.18 points or 0.29% at 81,289.96 points. The Nifty was down 93.10 points, or 0.38%, to 24,548.70 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday (December 11, 2024), as they offloaded shares worth ₹1,012.24 crore, according to exchange data.

The rupee witnessed range-bound trade and depreciated 3 paise to 84.07 against the U.S. dollar in initial deals. FIle
| Photo Credit: Reuters

The rupee witnessed range-bound trade and depreciated 3 paise to 84.07 against the U.S. dollar in initial deals on Wednesday (October 16, 2024), weighed down by significant foreign fund outflows and the strength of the American currency in the overseas market.

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

At the interbank foreign exchange, the rupee opened at 84.03 against the greenback. In the initial trade, it touched 84.07, registering a fall of 3 paise over its previous close.

On Tuesday (October 15, 2024), the rupee witnessed a range-bound trade and appreciated 1 paisa to 84.04 against the U.S. dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.06% lower at 103.19.

According to traders, the rupee remains under intense pressure, mainly due to Foreign Institutional Investors (FIIs) offloading approximately $8 billion in October.

“The sell-off stems from profit-booking by FIIs, as Indian equities, after months of inflows totalling $25 billion, are now seen as overvalued. Adding to the pressure is the strengthening dollar index, which has surged to a two-month high of 103.25,” CR Forex Advisors MD Amit Pabari said.

Mr. Pabari further noted that despite these headwinds, the rupee’s downside seems limited, with the RBI ready to intervene if necessary.

“Globally, oil prices have dropped by 5% due to weaker demand forecasts and reports that Israel is unlikely to target Iranian oil assets, easing supply concerns,” he said.

Brent crude, the global oil benchmark, rose marginally by 0.26% cent to $74.44 per barrel in futures trade.

On the domestic equity market front, Sensex advanced 40.90 points, or 0.05%, to 81,861.02 points. The Nifty rose 11.45 points, or 0.05%, to 25,068.80 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.