Image used for representational purposes. | Photo source: Reuters
The rupee depreciated by 3 paise to 83.48 against the US dollar in early trade on April 30 on the back of a sturdy US currency against major Asian rivals and a rise in crude oil prices.
However, positive sentiment in domestic equity markets and some inflow of foreign capital into Indian equities has halted the decline in the Indian currency, forex traders said.
At the interbank forex market, the domestic unit opened at 83.46 against the dollar and then fell to 83.48, registering a loss of 3 paise from its previous closing level.
On Monday, the rupee fell by 7 paise to 83.45 against the US dollar.
Gaurang Somaiya, forex and gold analyst at Motilal Oswal Financial Services Ltd, said the rupee weakened amid growing concerns that the US Federal Reserve may delay interest rate cuts as inflation in the country remains above the central bank’s target of 2%. .
“The US economy remains resilient and thanks to the Fed’s hawkish stance, the dollar remains well supported at lower levels,” he said, adding that the USD-INR (spot) pair is expected to “trade sideways with a positive bias in the range of 83 ,20″. -83.50″.
The Federal Open Market Committee (FOMC) begins its meeting on Tuesday, and a decision on interest rates is expected to be announced on Wednesday.
Additionally, market participants are expected to take cues from the US consumer confidence index released on Tuesday and Wednesday’s domestic manufacturing PMI data.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.27% to 105.73.
Brent crude futures, the global crude oil benchmark, rose 0.06% to $88.45 a barrel.
On the domestic equity market, the 30-share BSE Sensex was trading 135.59 points or 0.18% higher at 74,806.87. The broader NSE Nifty index rose 47.65 points or 0.21% to 22,691.05.
Foreign institutional investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth ₹ 169.09 crore on a net basis, exchange data showed.
