The rupee experienced significant volatility during morning trading on Wednesday, with positive domestic equities providing some support while global uncertainties put pressure on the currency. Forex traders noted that the ongoing uncertainty in the global economy was impacting both currencies and commodities, leading investors to adopt a cautious approach.
Starting at 86.56 against the US dollar, the rupee dropped to a low of 86.71 in a highly volatile morning session. This followed a 13 paise decline to 86.58 on Tuesday. The dollar index, which measures the greenback against a basket of currencies, was up 0.07% at 108.13.
Brent crude, the global oil benchmark, saw a slight increase to $79.36 per barrel. Domestically, Indian markets were influenced by global uncertainties, with foreign investors selling over $7 billion worth of securities this month. This selling pressure impacted the rupee and Indian markets, according to CR Forex Advisors MD Amit Pabari.
Pabari highlighted that budget allocations and decreasing crude oil prices could offer support to the rupee in the future. However, with the Union Budget approaching, market volatility is expected to persist as traders remain cautious. The USD/INR pair is forecasted to trade between 86.20 and 86.80 as global uncertainties continue.
On the stock market front, the Sensex opened positively and was up 224.31 points, or 0.30%, at 76,062.67 in early trade. The Nifty also saw gains, up 37.70 points or 0.16% at 23,062.35. Foreign Institutional Investors (FIIs) were net sellers on Tuesday, offloading shares worth ₹5,920.28 crore.
Published on January 22, 2025.
