The rupee ended weaker against the US dollar on Thursday, closing at 86.64 (provisional), a nine paise decline. This drop was attributed to a strong US dollar, influenced by the hawkish stance of the US Federal Reserve.
Forex traders noted that the rupee faced ongoing pressure from foreign fund outflows and the overall strength of the American currency in global markets. The rupee opened at 86.58 against the US dollar, reaching a high of 86.56 and a low of 86.65 during the trading session before settling at 86.64, marking a nine paise decrease from the previous close.
In contrast, the dollar index, which measures the greenback against six major currencies, was slightly lower at 107.98. The US Federal Reserve’s decision to maintain interest rates between 4.25-4.5% at its Federal Open Market Committee (FOMC) meeting on Wednesday contributed to the dollar’s strength.
Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, commented on the scenario, stating that the rupee is likely to continue trading negatively due to the dollar’s strength, FII selling pressure, and month-end dollar demand from importers. Additionally, uncertainties surrounding US tariffs may further impact the rupee, although central bank intervention could provide support.
Looking ahead, market participants are monitoring US GDP and weekly unemployment claims data, as well as preparing for India’s Union Budget announcement on February 1 and the RBI’s bond buying. These events could introduce volatility to the market.
In the commodity market, Brent crude prices fell by 0.64% to USD 76.09 per barrel in futures trading. On the equity front, the BSE Sensex rose by 226.85 points, or 0.30%, to close at 76,759.81 points, while the Nifty increased by 86.40 points, or 0.37%, to reach 23,249.50 points.
Foreign Institutional Investors (FIIs) were net sellers of equities worth Rs 2,586.43 crore in the capital markets on the previous trading day.
