In the early Tuesday trading, the rupee showed marginal gains on the US dollar when it went on to touch 83.48. Meanwhile, the forex analysts pointed a view that an increasing dollar strength against other major currencies, higher crude oil prices, and investors’ inclination to repatriate monies overseas were some of the key restraining factors for the rupee’s upside potential.
Starting at 83.48 against the dollar, the rupee’s modest rise of 4 paise from the previous close was observed at the interbank foreign exchange market. Monday’s close saw the rupee settling at 83.52 against the greenback, a marginal decline.
The prospects of getting huge foreign direct investment (FDI) inflows are high, with Adani Group putting on the table to raise USD 600 million in offshore loans and Belstar Microfinance targeting to raise USD 150 million in shares through an Initial Public Offering (IPO).
Meanwhile, the dollar index, a measure of the greenback’s strength against major currencies, edged up to 105.18, marking a 0.13% increase. In the oil market, Brent crude futures climbed by 0.29% to USD 83.57 per barrel. Domestically, early trading saw the 30-share BSE Sensex gaining 19.43 points (0.03%) to reach 73,914.97, while the NSE Nifty rose by 19.90 points (0.09%) to 22,462.60 points. Foreign Institutional Investors (FIIs) turned net sellers in the capital markets on Monday, offloading shares worth Rs 2,168.75 crore, as per exchange data.
The complex and intertwined network comprising global as well as regional aspects is responsible for the behaviour of the relationship between the rupee and the dollar, steering investor sentiments and the flow of capital. With this in mind, as the trading time cycle progresses, the need for ongoing monitoring of the processes to meet both market players and government officials is highly important.
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