The Indian rupee closed a little bit lower on Tuesday, overturning previous gains, as traders turned their attention to the next Federal Reserve policy meeting in the United States. Although the price of crude oil has dropped and the dollar index softened, the domestic currency ended 2 paise under at 88.26 versus the U.S. dollar even though it opened at 88.33. The rupee is already down by 3.12 percent in 2025, which is indicative of the uncertainty in the world and the nervous investor attitude.
The market players indicated that rupee was trading in a tight range during the day, and not much volatility was expected before the major world events. Dollar index, which measures the performance of the greenback against a basket of six key currencies, fell 0.10 percent at 98.68 with traders awaiting much awaited meeting between Donald Trump and Xi Jinping later this week. The Federal Reserve will hold its meeting on October 28-29 and it is believed by most markets that it will cut the rate by another quarter-point, as per Bloomberg reports.
Analysts observed that the current U.S. government shutdown has postponed major data releases, however, the market opinion is that the Fed can be more dovish, which may relieve the emerging market currencies like rupee. Still Fed is maintaining a softer stance which indirectly offers some mild support to the currencies such as the rupee, according to currency analysts.
At the commodities market, the prices of crude oil traded at a lower point because investors considered the levels of the U.S. sanctions on the Russian producers. Brent crude futures dropped 1.80 to $64.44 per barrel, whereas WTI crude increased 1.78 to $60.18 per barrel at 3: 45 PM IST.
In the meantime, the actual real effective exchange rate (REER) of the Indian rupee dropped even further to 97.6 in September than in 98.8 in August, which portrays lesser competitiveness.
Click Here for Chhattisgarh News
Click Here for Entertainment News