The rupee depreciated by 18 paise to 88.66 against the US dollar on Thursday. This decline came as the US dollar’s recovery limited the domestic unit’s upward potential. Forex traders noted the dollar’s rally above the 100 level influenced this movement.
The US Federal Reserve minutes revealed most officials opposed a rate cut in December. This followed the October rate reduction, boosting the dollar’s strength. The rupee opened at 88.63 in the interbank foreign exchange market before losing ground.
It touched a low of 88.66 against the US dollar, marking an 18 paise drop from its previous close. On Wednesday, the rupee had appreciated 12 paise to close at 88.48. This shift highlights the currency’s volatility in response to global cues.
Meanwhile, the dollar index rose 0.03 percent to 100.25. This index measures the greenback against a basket of six major currencies. The slight increase reflects ongoing support for the dollar in international markets.
Brent crude futures traded 0.28 percent higher at USD 63.69 per barrel. As a global oil benchmark, its price movements often impact currency trends. Higher crude costs can pressure emerging market currencies like the rupee.
CR Forex Advisors MD Amit Pabari noted the rupee faces resistance around 88.80-89.00. It finds initial support near 88.40, with momentum gradually shifting in its favor. Positive factors are contributing to this gradual strengthening.
Lower crude costs and gains in domestic equities are boosting sentiment. A sustainable break below 88.40 could lead the rupee toward 88.00-87.70. This would indicate further strength for the domestic currency.
Pabari highlighted positive cues from US-India trade developments. Progress on the first phase of the trade deal appears more likely now. It is shifting from a distant dream to a near-term possibility.
Commerce Minister Piyush Goyal recently hinted at good news on the trade pact. He emphasized the deal must be fair, equitable, and balanced. These remarks followed President Donald Trump’s comments on the matter.
Trump stated the US is pretty close to a fair trade deal with India. He mentioned plans to lower tariffs on Indian goods at some point. Such developments could bolster the rupee’s performance.
On the domestic front, the Sensex climbed 284.49 points to 85,470.96. The Nifty also rose 83.35 points to 26,136 in early trade. Equity market gains often support currency stability.
Foreign Institutional Investors bought equities worth Rs 1,580.72 crore net on Wednesday. This influx of foreign capital can positively influence the rupee. It reflects investor confidence in Indian markets.
The interplay between global dollar strength and local factors continues to shape the rupee’s path. Traders are watching key levels for breakout signals. Each development adds to the currency’s dynamic story.