Broad losses in the dollar failed to aid the Indian rupee on Thursday as demand for the greenback from local corporates and large foreign banks weighed despite gains across most other Asian peers.
The rupee ended at 83.3425 against the U.S. dollar, barely changed from its close at 83.32 in the previous session.
Asian currencies were mostly higher, with the offshore Chinese yuan rising 0.3% to hover near its strongest level since July.
The dollar index was last quoted lower at 103.61 after recovering mildly overnight in light of data which showed that jobless claims in the United States fell more than expected.
The dollar index “can find some stabilisation around 104.00 into the weekend amid thinner trading volumes and a lack of market-moving data releases in the US,” ING Bank said in a note.
Markets in Japan and the U.S. are shut on Thursday on account of the Thanksgiving holiday.
While the rupee had opened slightly higher at 83.2875, the strength largely faded within the first hour of the trading session.
Alongside routine dollar demand from importers, large foreign banks were also bidding for dollars during the session, likely on behalf of custodian clients, a foreign exchange trader at a private bank said.
IPO-related inflows and lower crude oil prices offered the rupee some support on Thursday. IPOs worth $900 million are lined up in the domestic market this week.
Brent crude oil futures were lower in Asia after OPEC+ producers unexpectedly delayed a meeting on production cuts, raising questions about global crude supplies.
The market is positioned in a way that the domestic currency can fall any time, and so the rupee strength is quickly utilised, making dips (on USD/INR) short-lived, said Sajal Gupta, head of forex and commodities at Nuvama Wealth Management’s institutional desk.
