In early trade on Tuesday, June 11, 2024, the Indian rupee opened lower against the US dollar, weighed down by weak returns in domestic equities and strength in the US currency in overseas markets.
American economic data strengthened the dollar
According to forex traders, the US dollar strengthened on increased demand from oil importers and stronger than expected US economic data. In addition, the local unit was also weighed down by the increase in the price of crude oil.
In the interbank foreign exchange market, the local unit moved in a narrow range. It opened at 83.49 against the US currency and touched 83.50 in the beginning.
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Less room for early cuts due to rising inflation
On Monday, the rupee depreciated by 10 paise to 83.50 against the US dollar. The Reserve Bank of India’s positive economic outlook, along with stable growth and unchanged inflation forecasts, suggests that there is less room for potential early cuts due to rising inflation. It is likely to benefit from a favourable interest rate differential for the rupee, said Amit Pabari, MD, CR Forex Advisors.
In addition, foreign institutional investors (FIIs) continued their purchases. Industrial investments were the net buyers in the capital market on Monday, buying shares for INR 2,572.38 crore, according to stock exchange data.
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Sensex down by 155 points
Besides, anticipated revenue sources like Reliance Infrastructure, which aims to raise USD 350 million, SpiceJet, which aims to raise USD 250 million, and Clix Capital, which aims to raise USD 600 million, are likely to benefit from the rupee, Pabari said. Considering these factors, the rupee should fluctuate between 82.90 and 83.70, he added.
Meanwhile, the dollar index, which measures the dollar’s strength against a basket of six currencies, was 105.12, or 0.02 percent lower. Brent crude futures, the world oil benchmark, were down 0.20 percent at USD 81.47 a barrel. In the domestic stock market, the 30-share BSE Sensex was trading 155.45 points, or 0.20 percent lower at 76,334.63 points. The broader NSE Nifty was down 33.25 points, or 0.14 percent, at 23,225.95 points.
About Author
This article has been covered by Ms. Swara Kekatpure, a finance student at NMIMS University, Mumbai. She carefully analyses businesses in detail and ensures her work incorporates honesty, integrity, and unwavering dedication.
