The rupee in tandem with Asian currencies fell to its support zone of 83.97 as the Reserve Bank of India seemed to present at 83.97 to protect against any further weakness in the currency. File
| Photo Credit: Venkatachalapathy C.

The rupee declined 5 paise to 83.96 (provisional) against the U.S. dollar on Tuesday (September 3, 2024), tracking a strong greenback against major currencies overseas and a sluggish trend in domestic equities.

However, lower crude oil prices in international markets capped the decline in the local unit, forex traders said.

At the interbank foreign exchange market, the rupee opened 3 paise lower at 83.94 against the American currency and traded in the range of 83.94-83.98 during the day.

It finally settled at 83.96 (provisional) against the U.S. dollar, 5 paise lower than its previous close.

On Monday (September 2, 2024), the domestic currency settled at 83.91.

“The rupee in tandem with Asian currencies fell to its support zone of 83.97 as the Reserve Bank of India seemed to present at 83.97 to protect against any further weakness in the currency. There was a good amount of FPI and oil companies outflow which resulted in the rupee reaching near to the all-time low of 83.97,” Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Treasury Advisors LLP, said.

Meanwhile, Sensex recovered most of its losses to settle at 82,555.44 for the day, 4.40 points below its previous close, while the Nifty inched up 1.15 points to 25,279.85.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was up 0.15% at 101.80.

Brent crude, the international oil benchmark, declined 2.1% to 76.26 in futures trade.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday(September 2, 2024), as they purchased shares worth ₹1,735.46 crore, according to exchange data.

A customer holds a hundred rupees Indian currency notes near a roadside currency exchange stall in New Delhi, India, May 24, 2024.
| Photo Credit: REUTERS

The rupee depreciated 3 paise to close at 83.96 (provisional) against the American currency on Wednesday (August 28, 2024), amidst strong dollar demand from importers, particularly oil companies.

Forex traders said a positive trend in domestic equities, foreign fund inflows and overnight decline in crude oil prices cushioned the downside.

At the interbank foreign exchange market, the local unit opened at 83.94 and touched an intra-day low of 83.97 against the U.S. dollar.

The domestic currency finally settled at 83.96 (provisional), 3 paise lower from its previous close.

On Tuesday (August 27, 2024), the rupee depreciated by 6 paise to close at 83.93 against the American currency.

“We expect the rupee to trade with a slight negative bias on recovery in the US dollar and month-end dollar demand from oil marketing companies (OMCs) and importers,” said Anuj Choudhary— Research Analyst at Sharekhan by BNP Paribas.

Choudhary further noted that a rise in global risk sentiments amid a dovish Fed speech and rising expectations of a rate cut by the U.S. Fed in September may support the rupee.

“Traders may remain cautious ahead of U.S. GDP and core personal consumption expenditures (PCE) data from the U.S. this week.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.36% higher at 100.91.

Brent crude, the global oil benchmark, declined 0.93% to $78.81 per barrel.

Image used for representative purpose only
| Photo Credit: R. Ragu

The rupee traded in a narrow range and settled lower by 4 paise at 83.94 (provisional) against the American currency on Thursday, as relentless dollar demand from importers and relentless foreign fund outflows dampened investor sentiments.

However, a positive trend in domestic equities and lower global crude oil prices supported the domestic currency and restricted its fall, forex traders said.

At the interbank foreign exchange market, the local unit opened weak at 83.93 and touched an intraday low of 83.97 against the U.S. dollar.

The domestic currency finally settled at 83.94 (provisional), 4 paise lower from its previous close.

On Wednesday, the rupee fell 13 paise to 83.90 against the U.S. dollar.

“We expect the rupee to trade with a slight negative bias on outflows by foreign investors and demand for the greenback by importers. However, a positive tone in the domestic markets and declining global crude oil prices may support the rupee,” said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas.

Traders will now take cues from the weekly unemployment claims, existing home sales and PMI data from the U.S..

“Investors may remain cautious ahead of Fed Chair Jerome Powell’s speech at Jackson Hole Symposium for any cues on rate cuts by the central bank. USD/INR spot price is expected to trade in a range of ₹83.75 to ₹84.20,” Mr. Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.19% higher at 101.23.

Brent crude, the global oil benchmark, advanced 0.38 per cent to USD 76.34 per barrel.

On the domestic equity market front, Sensex advanced 147.89 points, or 0.18%, to close at 81,053.19 points. The Nifty rose 41.30 points, or 0.17%, to 24,811.50 points.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth ₹799.74 crore, according to exchange data.

Meanwhile, the Federal Reserve’s recent meeting minutes revealed that most officials are inclined towards a rate cut in September, and this has put downward pressure on the U.S. dollar and offered some support to the rupee.

Traders will now focus on cues from the Jackson Hole symposium, where Fed Chair Jerome Powell’s remarks could set the tone for global currency markets.