The Indian rupee turned flat at 83.94 against the US dollar in early trade on Friday (August 16, 2024) amid concerns over elevated crude oil prices and the outflow of foreign capital from domestic equity markets.

However, a positive sentiment in the domestic as well as global equity markets and a weak American currency supported the rupee, forex traders said.

At the interbank foreign exchange, the rupee opened at 83.93 and slipped further to trade at its previous session’s closing level of 83.94 against the greenback.

On Wednesday (August 14, 2024) the rupee settled 3 paise higher at 83.94 against the US dollar. The forex markets were closed on Thursday on account of the Independence Day.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally lower by 0.01 per cent at 102.80.

Brent crude, the global oil benchmark, declined 0.25 per cent to USD 80.84 per barrel.

On the domestic equity market front, Sensex surged 811.34 points, or 1.03 per cent, to 79,917.22 points. The broader Nifty also climbed 246.20 points, or 1.02 per cent, to 24,389.95 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Wednesday, as they offloaded shares worth Rs 2,595.27 crore, according to exchange data.

On the domestic macroeconomic front, wholesale inflation fell to a 3-month low of 2.04 per cent in July on the decline in prices of food items, especially vegetables, government data released on Wednesday showed.

The latest government data released on Wednesday showed India’s exports contracted 1.2 per cent to USD 33.98 billion in July, while the trade deficit widened to USD 23.5 billion.

The rupee appreciated 5 paise to 83.45 against the US dollar in early trade on Friday, July 5, 2024, as the American currency retreated from its elevated levels and was supported by significant foreign fund inflows.

At the interbank foreign exchange market, the local unit opened at 83.48 and gained further to 83.45 against the greenback, registering a rise of 5 paise from its previous close.

On Thursday, the rupee pared its initial losses and settled for the day on an almost flat note at 83.50 against the US dollar.

Forex traders said rising crude oil prices weighed on investor sentiments and restricted the upside. Brent crude futures, the global oil benchmark, declined 0.37 per cent to USD 87.11 per barrel.

“The pressure stems from oil marketing companies purchasing crude in anticipation of further price hikes, with Brent oil hovering around USD 87 per barrel. Additionally, it appears the Reserve Bank of India (RBI) is managing the rupee’s volatility, capping both its upward and downward movements,” CR Forex Advisors MD Amit Pabari said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 105, lower by 0.12 per cent.

“The Dollar Index fell towards 105 levels and US 10-year bond yields dropped towards 4.35 per cent, as a series of economic data showed a cooling US economy, thereby heightening the expectations that the US Fed will cut rates sometime soon,” Pabari added.

On the domestic equity market front, the 30-share BSE Sensex fell 386.58 points, or 0.48 per cent, to 79,663.09 points. The broader NSE Nifty declined 84.85 points, or 0.35 per cent, to 24,217.30 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Thursday, as they purchased shares worth ₹2,575.85 crore, according to exchange data.

The rupee depreciated 3 paise to 83.27 against the US dollar in the morning session on Wednesday, November 1, 2023 tracking a strong American currency overseas and muted trend in domestic equities.

Persistent foreign fund outflows also weighed on the local unit, forex traders said.

At the interbank foreign exchange, the rupee opened at 83.26 against the dollar. It touched a low of 83.27 in initial deals, registering a fall of 3 paise over its previous close.

On Tuesday, the rupee settled at 83.24 against the American currency.

In October, the USD/INR pair exhibited an unusual trend, with the lowest monthly intraday trading range observed recently. For most of the month, except for a few sessions, the interbank rate remained close to 83.25, varying just by one or two paise above or below, CR Forex Advisors MD-Amit Pabari said.

This apparent stability stands out, given the backdrop of significant global events, such as the Israel-Palestine conflict, a strong US Dollar Index (US DXY), and elevated US 10-year bond yields, among others.

“It’s essential to remember that lower volatility often signals a contrary opinion, indicating the potential for increased volatility in the near future,” Pabari added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 106.70, higher by 0.04 per cent.

Global oil benchmark Brent crude futures declined 0.05 per cent to USD 87.41 per barrel.

On the domestic equity market front, BSE Sensex was trading 64.82 points or 0.10 per cent lower at 63,810.11 points, while the broader NSE Nifty declined 5.30 points or 0.03 per cent to 19,074.30 points.

Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth ₹696.02 crore, according to exchange data.

On the domestic macroeconomic front, the growth of eight key infrastructure sectors slowed down to a four-month low of 8.1 per cent in September 2023 against 8.3 per cent a year ago, according to the official data released on Tuesday.

The central government’s fiscal deficit touched 39.3 per cent of the full-year target in the first half of the current financial year, slightly higher than 37.3 per cent recorded in the year-ago period.

The rupee rose 9 paise to 83.10 against the US dollar in early trade on Friday, September 29, 2023 amid a retreating dollar versus major rivals and positive cues from the equity markets.

Massive selling of equities by foreign investors and an upward trend in crude oil prices, however, capped the rise of the domestic currency, forex dealers said.

The Indian unit opened strong at 83.13 against the US dollar and touched the highest level of 83.09. It later traded at 83.10 against the greenback, registering a gain of 9 paise from its previous close.

On Thursday, the rupee settled 3 paise higher at 83.19.

Analysts said higher interest rates and US bond yields were prompting foreign investors to stay in the selling mode in Indian capital markets, while the rupee witnessed some recovery due to a significant decline in India’s current account deficit (CAD).

CAD has dropped to $9.2 billion, or 1.1 per cent of GDP in the first quarter of the current fiscal, from $17.9 billion (2.1 per cent of GDP) a year ago, the Reserve Bank of India said on Thursday.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, declined by 0.19 per cent to 106.02.

Brent crude, the global oil benchmark, was trading 0.05 per cent higher at $95.43 per barrel.

On the domestic equity market front, the BSE Sensex climbed 84 points or 0.13 per cent to 65,592.32 in early trade. The Nifty advanced 37.75 points or 0.2 per cent to 19,562.30.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth ₹3,364.22 crore, according to exchange data.

The rupee appreciated by 9 paise to 82.61 against the US dollar in early trade on Friday, September 1, 2023 tracking cues from positive domestic equity markets on the back of robust macroeconomic data.

However, outflow of foreign funds and crude prices hovering around USD 87 per barrel weighed on the domestic unit, according to forex traders.

As per the government data released on Thursday, India recorded GDP growth of 7.8 per cent during the April-June period of 2023-24, the highest in the past four quarters, retaining its position as the world’s fastest-growing major economy.

At the interbank foreign exchange, the domestic unit opened strong at 82.58, then touched the lowest level of 82.63 against the greenback.

Later, the rupee was trading at 82.61 against the dollar, registering a gain of 9 paise from its previous close.

On Thursday, the rupee closed at 82.70 against the dollar.

Gaurang Somaiya, forex and bullion analyst at Motilal Oswal Financial Services, said: “Rupee rose marginally after data showed growth accelerated at 7.8 per cent in April-June quarter of FY24. However, the growth in the manufacturing sector fell to 4.7 per cent in the first quarter of the current fiscal as against 6.1 per cent in the year-ago period.

“Yesterday, the dollar rose marginally after core PCE index rose 4.2 per cent, a slightly stronger pace than the 4.1 per cent increase recorded in June. Today, volatility is expected to low ahead of the important non-farm payrolls and ISM manufacturing PMI number that will be released from the US. Lower-than-expected data could keep the dollar weighed down against its major crosses. We expect the USDINR (Spot) to trade sideways with a negative bias and quote in the range of 82.30 and 82.80,” Mr. Somaiya added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.03 per cent to 103.65.

Brent crude futures, the global oil benchmark, was trading 0.23 per cent higher at USD 87.03 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 71.05 points or 0.11 per cent higher at 64,902.46 points. The broader NSE Nifty advanced 36.90 points or 0.19 per cent to 19,290.70 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth ₹2,973.10 crore, according to exchange data.