Mumbai Forex Update: Rupee Edges Up Amid Mixed Market Signals
Mumbai – The Indian rupee appreciated by 2 paise to 83.96 against the US dollar in early trading on Friday, primarily due to a weakening dollar. However, rising crude oil prices and ongoing Foreign Institutional Investor (FII) outflows limited further gains for the domestic currency, according to forex traders.
The rupee commenced the day at 83.97 per dollar, reflecting a slight increase of 1 paisa from the previous day’s close, before advancing to 83.96. On Thursday, the local currency had settled at 83.98.
Market analysts suggest that the rupee is likely to trade within a range of 83.75 to 84.10, indicating a continuation of the sideways trend observed in recent sessions.
In the backdrop, the dollar index, which measures the greenback’s strength against a basket of six currencies, declined by 0.11 percent, reaching 102.87 points. This weakening of the dollar provided some support for the rupee’s modest rise.
However, concerns surrounding rising crude oil prices are looming large. Brent crude, the international benchmark, increased by 1.48 percent, trading at USD 77.71 per barrel in futures markets. Higher oil prices often contribute to inflationary pressures and can impact the Indian economy negatively, influencing the rupee’s performance.
In the equity markets, the sentiment was also subdued, with the 30-share BSE Sensex down by 147.67 points, settling at 81,463.74, and the Nifty index declining by 39.15 points to 24,959.30. This weak performance in domestic equities is another factor that prevented the rupee from gaining further strength.
Foreign Institutional Investors remained net sellers in the capital markets on Thursday, offloading shares worth Rs 4,926.61 crore, as per exchange data. Continuous FII outflows can exert additional pressure on the rupee, underscoring the importance of monitoring investor sentiment in the days ahead.
As traders navigate these mixed signals, attention will remain focused on global economic indicators, oil price fluctuations, and FII activity to assess the trajectory of the rupee in the coming sessions.
