The Indian rupee experienced an increase of 7 paise, against the US dollar on Monday benefiting from the gains in Asian currencies. This rise was mainly driven by the decline in US Treasury yields as investors speculated that the US Federal Reserve may have completed its cycle of interest rate hikes. The Indian rupee ended the day at 83.22 against the US dollar showing improvement compared to the closing rate of 83.29 on Friday.
The US dollar index, which measures the strength of the greenback against a basket of six currencies, recorded a decline of 0.10%, reaching 104.92. During the trading session, the yield on 10-year US bonds increased to 4.59% although it remained below October’s year high of over 5%.
On the preceding Friday, the Indian rupee had finished lower by 5 paise at 83.29 against the US dollar. While gains in equity markets supported the rupee it faced resistance due to demand from oil companies and importers.
An expert in foreign exchange research stated that “the rupee is expected to remain rangebound in the term with a tendency, towards depreciation.”
He mentioned that the Indian rupee had been stabilizing despite some news so it might not have a surge, in response to a bit of positive news. Moreover, the rise in crude oil prices played a role in restricting the gains in the value of the rupee.
Brent crude witnessed an increase of 1.59%, reaching $86.24 per barrel, whereas US West Texas Intermediate crude experienced a rally of 1.76% to reach $81.93, per barrel.
Overall, the Indian rupee’s performance against the US dollar was influenced by global market dynamics and the sentiments surrounding the Federal Reserve’s interest rate policies. The currency is expected to maintain a stable yet cautious stance as it navigates various economic factors and external influences.
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