Indian Rupee Gains Against US Dollar Amid Global Currency Shifts

Indian Rupee Gains Against US Dollar Amid Global Currency Shifts

VoM News Desk | November 15, 2023 | 10:43 AM IST | Breaking News | Follow on Google News

Indian Rupee Gains Against US Dollar Amid Global Currency Shifts

Indian Rupee Gains Against US Dollar Amid Global Currency Shifts

The Indian rupee witnessed a significant rise against the US dollar on Wednesday, opening 27 paise higher. This improvement in the rupee’s value is attributed to a sharp drop in the American currency and US Treasury yields. The local unit opened at 83.06 against the dollar, compared to its previous close of 83.33.

The dollar index, which measures the US dollar against six major currencies, saw a slight increase of 0.02% to 104.08. This rise came after the index fell below the 104 level in the previous session. Concurrently, the 10-year US benchmark yield remained relatively stable at 4.45% after experiencing a drop to 4.41%.

Recent Market Closures and the Rupee’s Performance

Indian markets were closed on Tuesday, but on Monday, the rupee had closed marginally higher at 83.33 against the dollar. The recent decline in the US dollar was the most significant in a year, following softer inflation data. This data fueled speculation that the US Federal Reserve might halt further interest rate hikes and potentially start reducing rates by mid-2024.

Anand James, Chief Market Strategist at Geojit Financial Services, noted the rupee’s resistance at the 83.02 mark, suggesting potential fluctuations between this point and 83.19. He also mentioned the possibility of the rupee slipping to 82.78.

Inflation Data and Economic Forecasts

US inflation rose by 3.2% year-on-year in October, a slight decrease from September’s 3.7%. This was slightly lower than economists’ expectations. In India, the consumer price index (CPI) indicated that retail inflation eased to 4.87% in October, marking a four-month low.

ICICI Direct anticipates the rupee to appreciate further, citing the cooling US CPI numbers and the likelihood of the Federal Reserve pausing its rate hike cycle. The USDINR is expected to reach the 83.00 mark, with a potential drop to 82.80. However, rising crude oil prices, with Brent crude at $82.76 a barrel and US West Texas Intermediate at $78.50 a barrel, might limit the rupee’s gains.

Indian Stock Market Reaction

The Indian stock market responded positively, with indices trading higher due to widespread buying and favorable global cues. The Sensex was up by 565.77 points, while the Nifty 50 gained 182.00 points. Foreign institutional investors (FIIs) sold Indian shares worth ₹1,244.44 crore, whereas Domestic Institutional Investors (DIIs) purchased shares amounting to ₹830.40 crore, as per provisional data.

VoM News Desk

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