According to Jateen Trivedi, VP Research Analyst at LKP Securities, the capital market experienced profit booking, particularly in the financial sector, which had an impact on the rupee’s performance.
Updated On – 09:55 PM, Thu – 31 August 23
Mumbai: The rupee depreciated by 7 paise to settle at 82.70 against the US dollar on Thursday, tracking a firm American currency and rising crude oil prices.
Forex traders said that negative sentiment in the equity market and outflow of foreign funds also weighed on the domestic unit. Investors were also awaiting the domestic GDP data which was announced later in the day.
At the interbank foreign exchange, the domestic unit opened at 82.65 and moved between the peak of 82.58 and the lowest level of 82.79 during intra-day trade.
The Indian currency finally settled at 82.70 against the dollar, registering a fall of 7 paise compared to the previous close. On Wednesday, the rupee closed at 82.63 against the dollar.
The latest US data indicated that the pace of growth was less than expected, raising hopes for the easing of interest rates by the Federal Reserve.
“We expect the rupee to trade with a slight negative bias on expectations that the US dollar may bounce back amid disappointing European data. Rising crude oil prices and FII outflows may also weigh on the rupee.
“Month-end dollar demand from importers may also put downside pressure on the domestic unit. However, improved global risk appetite amid expectations of a Chinese stimulus may support riskier assets.
“Traders may remain cautious ahead of India’s fiscal deficit and GDP data today and manufacturing PMI data tomorrow. Investors may remain cautious ahead of the US core PCE deflator, weekly unemployment claims and personal income data today and non-farm payrolls report tomorrow,” Anuj Choudhary, Research Analyst at Sharekhan by BNP Paribas, said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.37 per cent to 103.54.
Brent crude futures, the global oil benchmark, was trading 0.52 per cent higher at USD 86.31 per barrel.
According to Jateen Trivedi, VP Research Analyst at LKP Securities, the capital market experienced profit booking, particularly in the financial sector, which had an impact on the rupee’s performance.
The rupee’s upward trajectory was curtailed, and it edged towards 82.75 against the dollar.
“Market participants are now focusing on key data releases, including jobless data later in the evening and the Non-farm Payrolls (NFP) and unemployment data scheduled for tomorrow.
“These data points will play a crucial role in the Federal Reserve’s decision-making process regarding interest rates,” Trivedi said and anticipated the rupee’s trading range between 82.50 and 82.90.
On the domestic equity market front, the BSE Sensex closed 255.84 points or 0.39 per cent lower at 64,831.41 points while the broader Nifty declined by 93.65 points or 0.48 per cent to end at 19,253.80 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital market on Thursday as they offloaded shares worth Rs 2,973.10 crore, according to exchange data.
