In early trade on Wednesday, the Indian rupee experienced a 5 paise depreciation, reaching 82.85 against the US dollar. This decline was attributed to the robust performance of the American currency in the global market and heightened crude oil prices, impacting investor sentiment.
Forex traders anticipate the rupee to exhibit a minor negative bias due to the US dollar’s recovery and concerns surrounding elevated crude oil costs. However, the domestic market’s positive outlook may offer support to the rupee at lower levels. At the interbank foreign exchange, the rupee initiated trading at 82.82 against the dollar, reaching an early low of 82.85 against the greenback.
On the preceding day, the rupee maintained a narrow range, settling 5 paise lower at 82.80 against the US dollar. The US dollar index, gauging the greenback’s strength against a basket of six currencies, stood at 102.88, reflecting a 0.07% decline.
The stability of the US dollar persisted as traders considered higher-than-expected US Consumer Price Index (CPI) inflation, reaching 3.2%, compared to the previous month’s figure of 3.1%.
Brent crude futures, the global oil benchmark, exhibited a 0.56% increase, reaching USD 82.38 per barrel.
On the domestic equity front, the Sensex advanced 39.69 points (0.05%) to 73,707.65, while the Nifty fell 10.10 points (0.05%) to 22,325.60. Foreign institutional investors (FIIs) emerged as net buyers on Tuesday, purchasing shares worth Rs 73.12 crore, according to exchange data.
From a macroeconomic perspective, India’s industrial production growth slowed to 3.8% in January, while February’s retail inflation remained within the Reserve Bank’s comfort zone at 5.09%, marking the sixth consecutive month, according to the latest government data. The economic landscape, influenced by global and domestic factors, continues to shape the rupee’s performance in the foreign exchange market.
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