The Indian rupee relinquished its early gains to conclude the trading day 5 paise lower at 83.50 (provisional) against the US dollar, facing pressure from surging crude oil prices. The currency’s performance was also influenced by a subdued trend in domestic equities, dampening investor sentiment across the board.
At the interbank foreign exchange market, the rupee commenced trading at 83.43 against the greenback. Despite touching an intraday high of 83.42, it eventually dipped to a low of 83.50 before settling at 83.50 (provisional), marking a decline of 5 paise compared to its previous close.
During the previous trading session on Friday, the rupee had experienced a marginal uptick of 1 paisa to settle at 83.45 against the US dollar. However, forex traders noted increased demand for the US dollar from importers combined with a rebound in crude oil prices, which exerted downward pressure on the rupee’s value.
Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, commented on the rupee’s outlook, stating, “We expect the rupee to trade with a slight positive bias on the rise in risk appetite in global markets. However, any recovery in crude oil prices may cap sharp upside. Any renewed geopolitical tensions in the Middle East may also weigh on the rupee at higher levels.”
Choudhary projected the USD-INR spot price to fluctuate within a range of Rs 83.20 to Rs 83.70 amid prevailing market conditions.
Meanwhile, the dollar index, which measures the strength of the greenback against a basket of six major currencies, recorded a marginal uptick of 0.06% to 105.09. Brent crude futures, the global oil benchmark, advanced by 0.80% to USD 83.62 per barrel, exerting additional pressure on the rupee.
On the domestic front, the equity market witnessed mixed performance, with the Sensex edging up by 17.39 points, or 0.02%, to settle at 73,895.54 points. Conversely, the Nifty declined by 33.15 points, or 0.15%, to close at 22,442.70 points.
Foreign Institutional Investors (FIIs) turned net sellers in the capital markets on Friday, offloading shares worth Rs 2,391.98 crore, as per exchange data.
Additionally, the Reserve Bank of India (RBI) reported a decline in India’s forex reserves by USD 2.412 billion to USD 637.922 billion as of April 26, marking the third consecutive weekly decrease.
In economic news, the seasonally adjusted HSBC India Services Business Activity Index declined from 61.2 in March to 60.8 in April, reflecting one of the strongest growth rates observed in nearly 14 years.