On Tuesday, the rupee lost 15 paisa to settle at 83.21 (provisional) against the US dollar as poor domestic equities and a strong US dollar dampened investor optimism. Forex traders claimed that the rupee was under pressure to fall due to subdued domestic macroeconomic indicators and ongoing FII withdrawals. The local currency started out at 83.21 versus the US dollar on the interbank foreign exchange market and fluctuated between 83.23 and 83.17.
In the end, the rupee lost 15 paisa to close at 83.21 (provisional) against the US dollar. The rupee gained 13 paisa on Friday to close at 83.06 against the US dollar.
Due to Mahatma Gandhi Jayanti, the local foreign exchange market was closed on Monday. The dollar index, which measures the value of the dollar against a basket of six different currencies, increased by 0.14 percent to 104.05.The benchmark for world oil, Brent crude futures, fell 0.02 percent to USD 90.69 a barrel.
As the hawkish Fed rhetoric and a strong dollar may continue to put downward pressure on the rupee, we expect the rupee to trade with a bearish bias. Risk aversion on international markets could have a negative impact on the local currency.
According to a monthly survey released on Tuesday, manufacturing in India experienced its lowest level in five months in September as new orders increased more slowly than expected, which restrained production growth. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI), which measures purchasing managers’ activity, dropped to 57.5 in September from 58.6 in August, the lowest level in five months.
