The Indian Rupee closed at 95.22 on Thursday, weakening by 14 points against the US dollar. The rupee was pressured by a slight strengthening of the dollar index and a minor rise in US Treasury yields. During the trading session, the rupee fluctuated in the range of 95.12 to 95.24, opening at 95.13.
According to Forex traders, the rupee's depreciation was also reinforced by continuous outflows from foreign funds. Nevertheless, the decline in crude oil prices provided some relief to the rupee, preventing a sharper fall. Previously, on Wednesday, the rupee had strengthened by 20 points, closing at 95.08 per dollar.
Anuj Choudhary, an analyst at Mirai Asset Sharekhan research department, noted that the main reason for the pressure on the rupee was the moderate rise in the dollar index and a small acceleration in US Treasury yields. However, weak crude oil prices and expectations of a deal between the US and Iran helped prevent too sharp a weakening of the rupee.
In Choudhary's view, the rupee may maintain a slight positive trend in the coming days due to rising risk appetite in global markets. Meanwhile, any sharp increase in the dollar index or US Treasury yields could limit the rupee's growth. The market is now awaiting data on weekly US unemployment claims, according to which the USD-INR pair may remain within the 94.80 – 95.50 range.
Meanwhile, the dollar index, which measures the strength of the US dollar against six major currencies, stood at 99.78, showing a drop of 0.11%. The global oil benchmark Brent Crude Futures rose by 0.09% to reach $79.52 per barrel. Anil Kumar Bhansali, Head of Treasury and CEO of Finerex Treasury Advisors LLP, stated that keeping Brent Crude prices around $80 per barrel is favorable for India.
The decrease in oil prices in the current range reduces the burden on India's import bill compared to prices above $100 per barrel in July. This also lessens pressure on inflation and the current account. On the domestic stock market, there was mixed movement on Thursday. The Sensex index closed at 78,954.76, showing a gain of 373.76 points, while the Nifty rose by 11.35 points to reach 24,636. According to exchange data, Foreign Institutional Investors (FIIs) recorded net sales of 17.86 crore rupees in the Indian stock market on Thursday.
