A cashier checks Indian rupee notes inside a room at a fuel station in Ahmedabad.
| Photo Credit: REUTERS

The rupee appreciated 10 paise to close at 83.87 (provisional) against the American currency on Thursday (August 29, 2024), supported by easing crude oil prices and a firm trend in domestic equities.

Forex traders said the market is awaiting cues from the U.S. GDP and the U.S. Personal Consumption Expenditure (PCE) inflation data, as this data point is crucial since it could sway the Federal Reserve’s decision on whether to implement a 25 or 50 basis point rate cut at its September meeting.

At the interbank foreign exchange market, the local unit opened at 83.92 and touched an intra-day high of 83.84 against the U.S. dollar.

The domestic currency finally settled at 83.87 (provisional), 10 paise higher from its previous close.

On Wednesday (August 28, 2024), the rupee depreciated 4 paise to close at 83.97 against the American currency.

According to Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities, the rupee gained 10 paise, as expectations of interest rate cuts continue to provide support, preventing the rupee from falling below 84.00.

“The strong demand around 84.00 keeps the rupee buoyant, with resistance seen at 83.75. The rupee is expected to trade in a positive range between 84.00-83.70,” Mr. Trivedi said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.11% higher at 101.20.

Brent crude, the global oil benchmark, declined 0.34% to $78.38 per barrel.

On the domestic equity market front, Sensex rose 349.05 points, or 0.43%, to close at 82,134.61 points. The Nifty closed 99.60 points, or 0.4%, up at 25,151.95 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth ₹1,347.53 crore, according to exchange data.

Image for representational purposes only.
| Photo Credit: REUTERS

The rupee was trading in a narrow range against the U.S. dollar in early trade on May 10, as the support from positive domestic equities was negated by elevated crude oil prices.

Forex traders said the strength of the American currency in the overseas market and significant foreign fund outflows dented investors’ sentiments.

At the interbank foreign exchange market, the local unit opened at 83.48, it touched 83.46 in the initial trade, registering a gain of 2 paise from its previous close.

On May 9, the rupee closed at 83.48 against the American currency.

“The Indian Rupee was again sold-off on May 9 as FPIs outflows continued to trigger demand for the U.S. dollar, while probable RBI selling at 83.50 did not allow a higher up move on the USD/INR pair. On May 10 also the same is expected from the USD/INR pair with RBI continuing its control at 83.50,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was at 105.30, higher by 0.07%.

Brent crude futures, the global oil benchmark, rose 0.5% to $84.34 per barrel.

On the domestic equity market, the 30-share BSE Sensex was trading 169.82 points, or 0.23% higher at 72,573.99 points. The broader NSE Nifty was up 67.05 points, or 0.31%, to 22,024.55 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on May 9 as they offloaded shares worth ₹6,994.86 crore, according to exchange data.

“FPIs offloaded ₹22,858 crore in six market sessions in May 2024, while DIIs (Domestic Institutional Investors) were buyers to the tune of ₹16,700 crore. Uncertainty in election results and higher U.S. treasury yields were the main causes of this sell-off,” Mr. Bhansali added.