- Crude oil prices above $83 per barrel also exerted pressure on the domestic currency.
- Positive equity markets prevented a steep fall in the rupee.
- Investors were awaiting cues from US GDP data and domestic GDP numbers later this week.
In early trade on Wednesday, the Indian rupee remained flat at 82.89 (Dh22.58) against the US dollar, resisting pressure amid the unabated outflow of foreign funds and increased month-end demand for the American currency.
Forex analysts noted that crude oil prices hovering above $83 per barrel also exerted pressure on the domestic currency. However, positive equity markets provided a cushion and prevented a steep fall in the rupee.
Analysts noted that investors were also awaiting cues from US GDP data scheduled for release later in the day and domestic GDP (Gross Domestic Product) numbers later this week. At the interbank foreign exchange, the local currency opened at 82.90 and then inched up to trade at the previous day’s closing level of 82.89 against the greenback.
On Tuesday, the rupee closed 1 paisa lower at 82.89 against the US dollar. The dollar index, which measures the greenback’s strength against a basket of six currencies, rose by 0.09 percent to 103.92.
Forex and bullion analyst Gaurang Somaiya from Motilal Oswal Financial Services stated that the dollar index traded neutral against its peers after the US data revealed that the consumer confidence index for February dropped lower than anticipated. Additionally, the data on durable goods orders indicated a contraction.
“Currently, the Fed watch tool suggests that market participants are pricing rate cuts to begin no time before June, and the upcoming core PCE (Personal Consumption Expenditures) price index tomorrow and GDP figures today will be heavily watched for,” he said, adding that the USD-INR (Spot) is expected to trade “sideways and quote in the range of 82.80-83.20″.
In the domestic equity market, the 30-share BSE Sensex was trading 17.46 points or 0.02 percent higher at 73,112.68 points, while the broader NSE Nifty rose 10.10 points or 0.05 percent to 22,208.45 points.
According to exchange data, foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday as they sold shares worth Rs 1,509.16 crore on a net basis. Brent crude futures, the global oil benchmark, were trading 0.49 percent lower at USD 83.24 per barrel.
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