On Thursday the Indian rupee started off weaker, against the US dollar opening at 82.72 paise, which was down 14 paise compared to the close of 82.58. This decline can be attributed to the strength of the dollar against currencies and higher US yields following a credit rating downgrade.
Asian currencies also experienced losses with equities declining by as 1.4%. In addition to these factors the rupee has been under pressure due to crude oil prices weak global risk appetite and foreign fund outflows. Yesterday we saw the rupee record its single day decline in two months as it closed at 82.58 against the dollar.
Analysts predict that there could be depreciation for the rupee due to a dollar and negative market sentiments worldwide. The strength of the dollar is fueled by payroll data which indicates a resilient job market and suggests that interest rates may remain high for an extended period according to Federal Reserves actions.
Despite these challenges experts believe that support for the rupee could be found around the level of 82.50 with a rise, towards 82.80 as mentioned in a brokerage note.
Crude oil prices have increased recently as markets consider US inventory data and contemplate an extension of OPEC output cuts.
Brent crude futures experienced a rise reaching $83.32, per barrel representing a 0.14% increase. Meanwhile US West Texas Intermediate crude also saw a gain of 0.13% with prices reaching $79.59, per barrel.
When it comes to the scenario, the Indian benchmark equity indices, Sensex and Nifty were trading lower during the pre opening session contributing to the prevailing economic uncertainty.