The Indian rupee witnessed a depreciation of 8 paise against the US dollar on Friday, ending its four-day winning streak. The rupee closed at 82.16 against the dollar following a rebound in the American currency against global peers and firm crude oil prices. Although the US dollar strengthened, robust buying in domestic equity markets limited the losses for the local unit. The rupee opened at 81.97 but gradually erased all gains to settle at 82.16, down by eight paise compared to the previous close.
The dollar index, which measures the strength of the greenback against a basket of six currencies, increased by 0.10 percent to 99.56. Analysts attributed the rupee’s decline to the rally in the dollar index and higher crude prices. Jateen Trivedi, VP Research Analyst at LKP Securities, stated that the rupee initially rose to 81.94 but sharply fell to 82.21 as the dollar index rallied and crude prices rose.
Experts believe gold prices will likely remain uptrend due to the weakening US dollar. Anuj Gupta of IIFL Securities advised holding positions and accumulating gold on minor dips. At the same time, Amit Sajeja of Motilal Oswal suggested that international triggers will dictate gold prices in the near term.
The rupee’s performance against the US dollar will be influenced by factors such as improved global risk sentiments, extended weakness in the US dollar, and data releases such as the Producer Price Index (PPI) and weekly unemployment claims in the US. Analysts at Sharekhan by BNP Paribas expect the USD/INR spot to trade in the range of 81.60 to 82.50 soon.