MUMBAI, Oct 7: The Indian rupee experienced a decline of 3 paise, concluding the trading session at 88.77 against the US dollar on Tuesday.
This drop is attributed to the strength of the American dollar against other currencies globally. Throughout the day, the domestic currency fluctuated within a narrow range as market participants opted to remain cautious amidst ongoing uncertainties in global trade, as reported by forex traders.
The rupee opened at 88.72, peaked at an intra-day low of 88.79, and ultimately recorded a loss from the previous session’s close of 88.74, following a minor gain of 5 paise on Monday. Investor sentiment was notably affected by the US Senate’s rejection of both Democratic and Republican funding proposals, further extending the government shutdown into its sixth day.
Jateen Trivedi, VP of Research Analysis at LKP Securities, indicated that the rupee’s volatility was limited due to eased selling by foreign institutional investors (FIIs) and stable crude oil prices. However, the rupee remains near historical lows, raising concerns of potential further depreciation, possibly nearing the 90 mark if negative sentiment persists.
Looking ahead, the market is focused on key upcoming events including remarks from Fed Chair Jerome Powell, the release of the Federal Reserve’s meeting minutes, and important US unemployment and non-farm payroll data, which could trigger significant volatility. The anticipated trading range for the rupee is expected to be between 88.45 and 88.95.
The dollar index, reflecting the greenback’s strength against a basket of six currencies, rose by 0.34% to 98.13. Meanwhile, Brent crude oil prices saw a decline, trading 0.37% lower at USD 65.25 per barrel in futures markets. Concurrently, in political and economic context, Commerce and Industry Minister Piyush Goyal highlighted ongoing discussions between India and the US regarding a bilateral trade agreement, with optimism around meeting the November deadline for negotiations.
This statement follows External Affairs Minister S Jaishankar’s remarks that any such trade deal must respect India’s key interests, mentioning existing challenges in finalizing the agreement while stressing the need for negotiation on certain aspects.
In domestic equity performance, the Sensex gained 136.63 points (0.17%) to close at 81,926.75, and the Nifty rose by 30.65 points (0.12%) ending at 25,108.30. Furthermore, foreign institutional investors recorded a net purchase in equities amounting to Rs 1,440.66 crore on Tuesday, according to exchange data. (PTI)
