On Tuesday, the dollar depreciated marginally, reducing the value of the Indian rupee to 85.25 (provisional) per US dollar, down by 2 paise. Market sentiment was cautious about a strengthening dollar and the rising geopolitical tensions between India and Pakistan, and the domestic currency had traded in a narrow range through the day.
The rupee opened at 85.06 at the interbank foreign exchange market, within a limited band with fluctuations. The contract briefly rallied to an intraday high of 84.96 and a day low of 85.40 and closed at 85.25, a shade lower than Monday’s close of 85.23. After the rupee appreciated by 18 paise in the previous session, a decline occurred.
However, the analysts indicated that the minor depreciation was mainly due to a rebound of the US dollar based on global risk aversion and rising geopolitical concerns. The rise also comes as the dollar index, a measure of the greenback’s strength against a basket of six major currencies, rose 0.16 percent to 99.17.
On the other hand, the fall of the rupee was helped in part by a strong domestic economy. Indian equity markets stayed in positive territory as the BSE Sensex gained 70.01 points to settle at 80,288.38 and the Nifty 50 was up 7.45 points at 24,335.95. The drop in global crude oil prices also provided the rupee’s downside resistance. Brent crude futures decreased by 1.64% to USD 64.78 a barrel.
Market sentiment was also buoyed by foreign institutional investor (FII) activity, which came in the form of net equity purchases to the tune of Rs 2,474.10 crore on Monday, as per the exchanges’ data.
Near-term cues will come from geopolitical developments, continuing crude oil price, as well as further momentum in the dollar index, according to currency traders going ahead.
Join our whatsapp group for Latest updates
Click Here for Chhattisgarh News
Click Here for Entertainment News