Rupee rises 4 paise to settle at 84.06 against U.S. dollar

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The rupee recovered from its all-time low levels and appreciated 4 paise to close at 84.06 (provisional) against the U.S. dollar on Monday (October 14, 2024) supported by strong domestic equity markets.

Forex traders said the rupee was weighed down by the strong U.S. dollar and elevated crude oil prices.

Moreover, the Reserve Bank of India’s intervention, backed by record-high reserves supported the local unit at lower levels, they said.

At the interbank foreign exchange, the rupee opened at 84.06 against the greenback and traded in a tight range of 84.05 and 84.07. The unit settled for the day at 84.06 (provisional), registering a rise of 4 paise over its previous close.

On Friday (October 11, 2024), the rupee fell 12 paise to a record low of 84.10 against the U.S. dollar.

“We expect the rupee to trade with a negative bias on foreign fund outflows and geopolitical uncertainty in the Middle East. Overall strength in the U.S. dollar may further pressurise the rupee,” said Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas.

However, positive tone in the domestic markets may support the rupee at lower levels. “Traders may take cues from retail sales and housing data from the U.S. this week. USD-INR spot price is expected to trade in a range of ₹83.90 to ₹84.30,” Mr. Choudhary said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.08% higher at 102.97.

Brent crude, the global oil benchmark, declined 2.51% to $ 77.06 per barrel.

On the domestic equity market front, Sensex advanced 591.69 points, or 0.73%, to close at 81,973.05 points. The Nifty rose 163.70 points, or 0.66%, to settle at 25,127.95 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Friday (October 11, 2024), as they offloaded shares worth ₹4,162.66 crore, according to exchange data.

Forex traders said there has been significant foreign fund outflows and crude oil prices have surged by nearly 10%, fuelled by Hurricane Milton’s impact on U.S. production along with the tensions in the Middle East between Israel and Iran.

Meanwhile, India’s forex reserves dropped by $ 3.709 billion to $ 701.176 billion for the week ended October 4, the RBI said on Friday (October 11, 2024).

In the previous reporting week, the reserves had jumped by $ 12.588 billion to an all-time high of $ 704.885 billion.