The Indian rupee ended the trading session on a flat note, edging up by 1 paisa to settle at 83.30 against the US dollar on Wednesday. The currency’s movement was largely influenced by the balancing act between positive domestic equities and the strengthening American currency, according to forex traders.
Opening at 83.29 against the greenback at the interbank foreign exchange market, the rupee oscillated within a narrow range throughout the day, reaching an intra-day high of 83.26 and a low of 83.33 before settling at 83.30—marginally up from its previous close of 83.31.
Elevated crude oil prices and significant foreign fund outflows in the international market were cited as factors denting investor sentiment. Brent crude futures, the global oil benchmark, dipped 0.34% to USD 88.12 per barrel.
Mohammed Imran, a Research Analyst at Sharekhan by BNP Paribas, commented on the geopolitical risks in the Middle East, suggesting that while occasional price spikes could occur due to fresh energy sanctions on Iran, sustained prices above USD 85 are unlikely in the short term.
The dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up by 0.16% to 105.84. Anuj Choudhary, another Research Analyst at Sharekhan by BNP Paribas, anticipates the rupee to maintain a slight positive bias, supported by an increase in global risk appetite and easing tensions in the Middle East. However, hawkish comments from the Federal Reserve could potentially bolster the dollar at lower levels.
Looking ahead, traders are expected to monitor the durable goods orders data from the US and remain cautious ahead of the impending inflation data release later this week. Choudhary projected the USD-INR spot price to fluctuate within the range of Rs 83.05 to Rs 83.50.
On the domestic front, the equity market saw modest gains with the Sensex rising by 114.49 points (0.16%) to settle at 73,852.94 points, and the Nifty climbing 34.40 points (0.15%) to close at 22,402.40 points.
Foreign Institutional Investors (FIIs) remained net sellers on Tuesday, offloading shares worth Rs 3,044.54 crore, as per exchange data, signaling a cautious approach amid the global economic landscape.
