The latest record low of the Indian rupee was on July 31, 2024, at 83.7450 against the US dollar. The market was volatile mainly because of the large equity outflows and the Chinese yuan. Since the rupee declined against the dollar, the Reserve Bank of India (RBI) had to interfere in the foreign exchange market to just stop its fall in the INR vs USD rate.
The value of the US dollar against six other major currencies became somewhat weaker as evident from the fall in the dollar index by 0.19 percent, with the stable rate at 104.36. These have resulted in a decline in the dollar index, which is a measure of the currency against other world currencies.
On the commodities market, the Brent crude futures – the global reference price for oil prices – rose by 1.49 percent to USD 79.80 per barrel. This is having an effect on supply and demand for oil and various geopolitical aspects of oil markets across the world.
The focus shifts to the US Federal Reserve rate decision due later in the day, causing a decrease in the INR vs USD rate. There are growing market anticipations that the Federal Reserve may begin preparing the markets for a rate cut as soon as September, and signals such as this can have an impact on the value of financial markets and world currencies.
Significantly, FIIs were net sellers on Tuesday in the capital markets; they were selling shares worth Rs 5,598.64 crore. This selling activity underlines the effects of global factors as well as changes in the investors’ sentiment on the Indian financial markets.
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