The Indian rupee closed slightly stronger at 95.42 against the US dollar, buoyed by a weaker dollar overseas, yet remains under pressure from rising crude prices and geopolitical tensions, with experts predicting a narrow trading range in the near term.
The rupee firmed slightly on Friday, closing at 95.42 against the US dollar after the greenback weakened overseas, according to PTI. Even so, the currency remained under pressure from foreign portfolio outflows, higher crude prices and broader geopolitical unease, limiting the extent of the rebound.
At the interbank foreign exchange market, the local unit opened at 95.39 and moved in a narrow band between 95.38 and 95.44 before ending the session 3 paise stronger than the previous close. On Thursday, it had finished 12 paise lower at 95.45. PTI said the day’s modest recovery came as the dollar index eased to 99.78, while Brent crude rose 0.99% to $87.93 a barrel in futures trade.
Jateen Trivedi, vice-president, research analyst, commodity and currency at LKP Securities, said the rupee had been trading with a weak bias through the week, but remained largely range-bound. “Crude had surged around 25 per cent during July and continues to remain elevated, keeping the import-cost pressure on the rupee. Meanwhile, the dollar index remained below the 100-mark near 99.50, limiting the rupee’s downside. Technically, the rupee is expected to remain in the 95.10-95.80 range in the near term, with crude and the dollar remaining key directional triggers,” Trivedi said.
Earlier in the month, the currency had already been buffeted by a stronger dollar and persistent demand for the US currency. Business Standard reported on 1 July that the rupee posted its steepest one-day fall in more than three weeks, while Economic Times said it later slipped to a three-week low of 95.39 on 6 July amid higher dollar demand and arbitrage activity. On Friday, domestic equities were also weak, with the Sensex and Nifty both ending lower, and exchange data showed foreign institutional investors sold shares worth Rs 510.69 crore on Thursday.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
