Rupee Recovers 4 Paise to 83.41 Against US Dollar

by | Apr 30, 2024 | 0 comments

Rupee Recovers Against US Dollar Amid Market Volatility

Following a rather turbulent trading session, the Indian Rupee recovers 4 paise to settle at 83.41 against the U.S. dollar on Monday supported by foreign capital inflows and the greenback’s strength against major currencies overseas. Although oversold levels and late recovery in domestic equities saved it from early pressure of robust American currency amid rising crude prices, however it remained range bound due to choppy capital markets caused by higher implied volatility (IV) as investors are waiting for cues from key economic data points like manufacturing PMI which could provide some direction to trade setup ahead of crucial US interest rate decision scheduled this week.

Forex analysts said that during the day, the local unit witnessed volatile moments after it opened at 83.46 where it saw an intra-day high of 83.52 and a low of 83.41 against the American currency before concluding at 83.41, showing a marginal gain over its previous close.

The rupee declined last week also as oil prices surged and US dollar gained momentum post Fed meeting minutes. It fell 10 paise on Friday and lost another seven paise to end at 83.45 against US dollar on Monday. Jateen Trivedi,Vice President Research Analyst-LKP Securities said , “Volatility in Capital markets has kept rupee within range. The bond market is also suggesting weakness but stability seems to remain there till year end. “He further added that, “Now we have FOMC meet next week where rate hike is discounted so may be usd-inr can move towards Rs 84-85 a type level.”

Traders also weighed geopolitical developments impacting risk sentiment with India-China border tensions flaring up again while COVID cases continue surging globally with fresh lockdowns imposed across Europe; all these factors could lead to some safe-haven demand for dollar. Market participants will now be focusing on US Federal Open Market Committee (FOMC) meet scheduled this week for further cues on rates and domestic manufacturing data scheduled this week.

Globally, the dollar index, which gauges greenback’s strength against basket of six currencies was trading 0.13% higher at 105.58. Brent crude futures rose 0.15 percent to USD 88.53 per barrel.

On the equity market front, India’s benchmark indices ended lower after two days of gains dragged by metal, auto and IT stocks amid weak global cues.Sensex ended at 74,482.78 with a loss of 188.50 points or 0.25 percent. Nifty settled at 22,604.85 down by 38.55 points or 0.17 percent. According to exchange data, foreign institutional investors were net buyers in capital markets as they purchased shares worth Rs 169.09 crore on October 11.

All these factors could keep rupee volatile against dollar and other major trade partners’ currencies in coming days as market participants would be keeping eye over key economic indicators along with upcoming geopolitical developments.Worldwide Covid situation remains fluid with concerns rising over fourth wave hitting many countries across Europe leading them into fresh lockdowns while US FDA is also cautious on booster shots approval amid new variant detection so this could continue impacting risk sentiment negatively thus supporting safe haven demand for greenback.

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