Following the weakness of the U.S. dollar in the international market, the rupee increased 21 paise to end the day at 81.74 (provisional) against the U.S. dollar. Forex traders claimed that the local currency was also supported by an upward trend in domestic equities. The local unit began trading at 82 against the U.S. dollar on the interbank foreign exchange market and eventually concluded at 81.74 (provisional), gaining 21 paise from its previous level. The rupee’s value versus the dollar fluctuated throughout the session, reaching highs of 81.68 and lows of 82.01. The rupee’s closing value versus the U.S. dollar on Tuesday was 81.95.
The dollar index, which measures the value of the dollar relative to a basket of six different currencies, decreased 0.43 percent to 101.42. Benchmark Brent crude futures for world oil increased 0.12% to USD 80.87 per barrel. Due to rising domestic equities and a declining U.S. dollar, the rupee strengthened. Sharp gains were however limited, according to Anuj Choudhary, a research analyst at Sharekhan by BNP Paribas, by the recovery in crude oil prices and FII withdrawals.
The U.S. dollar fell as recession fears increased in the wake of unfavorable U.S. economic data and fresh banking worries.
“As banking issues increased anticipation that the Fed may turn dovish at its next Federal Open Market Committee (FOMC), we expect the rupee to strengthen on weakness in the US dollar.”Concerns over the US economy’s decline could potentially put pressure on the dollar. A rapid advance could be restrained, though, by selling pressure from overseas investors. In the immediate future, we anticipate the USD/INR spot rate to fluctuate between 81.20 and 82.20,” Choudhary added.
