Indian rupee (INR) recovered by 9 paise and traded at 82.99 against the US dollar in Thursday’s early trade after settling at an all-time low of 83.08 on Monday. The INR opened at 83.10 at the interbank foreign exchange and gained as the session progressed.
Forex market was closed on Tuesday and Wednesday on account of Independence Day and Parsi New Year, respectively.
The rupee recovered from its all-time low levels as crude oil price retracted from its elevated levels, a PTI report said. On Comex, crude oil futures were trading at 79.090, which was down by 0.260 or 0.330%.
Commenting on the performance of INR, analyst Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP said that Asian currencies have weakened against the dollar due to China rate cuts and its tumbling economy. The rupee today opened weaker on account of the China sentiments, he added.
He also attributed the ongoing strength in the USD to the US Federal Reserve’s hawkish stance in July FOMC minutes, which were released on Wednesday. “The FED was not dovish in its interest rate stance in FOMC minutes, which was expected by the market. Therefore dollar index rose to 103.53,” he said.
“IN NDF (non-deliverable forward) rupee had weakened to 83.50 but RBI kept a tab and slowed opening at 83.00. It’s a matter of risk aversion as Brent oil prices fell to $83.40 and equity markets were down,” Bhansali added. In his view, the INR can test levels of 86 against the greenback with most market participants going short on $. The long-term range is now 82-86 with a slow and grinding move towards the higher side,” the Finrex analyst said.
On the outlook of crude oil which has a bearing on currency movement, Prathamesh Mallya, Deputy Vice President of Research, Non-Agro Commodities & Currency, Angel One said that the crude oil prices were declining due to concerns about China’s economic slowdown and potential additional US interest rate hikes, both of which were dampening fuel demand in the world’s top two economies.
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