Updated February 28th, 2024 at 16:00 IST

Rupee closes marginally lower amid dollar strength

The rupee traded within a narrow range for most of the day but slipped towards the end of the session.

Reported by: Priyanshi Mishra
Rupee closes marginally lower amid dollar strength | Image: Unsplash
Advertisement

Rupee settles lower: The rupee closed slightly weaker against the US dollar on Wednesday, influenced by the performance of its Asian counterparts.

Despite dollar sales from state-run banks providing some relief, the rupee ended the session at 82.9225 against the dollar, down marginally from its previous close at 82.8975.

Advertisement

The dollar index, which measures the greenback against a basket of major currencies, rose by 0.3 per cent to 104.2. This strength in the dollar was reflected in the weakness of Asian currencies, with the Thai baht and Philippine peso both declining by 0.5 per cent.

Jateen Trivedi, VP Research Analyst, LKP Securities, stated, "The rupee traded sideways at 82.91, down by Rs 0.02. It fluctuated within the range of 82.88–82.96 as market participants remained cautious. The US dollar strengthened above $104, exerting slight pressure on the rupee to stay below 82.85." 

Advertisement

The rupee traded within a narrow range for most of the day but slipped towards the end of the session due to an uptick in the dollar index, according to a foreign exchange trader at a private bank.

Meanwhile analysts expect the currency to consolidate within the range of 82.80 to 83.15 in the near term. Meanwhile, dollar-rupee forward premiums declined, with the one-year implied yield falling by 3 basis points to 1.64 per cent, its lowest level in over two and a-half months.

Advertisement

The decline in the implied yield is attributed to reduced expectations of a rate cut by the Federal Reserve and improved liquidity conditions for the rupee.

Investors are now awaiting the release of revised US GDP data for the October–December quarter and remarks from Fed officials later in the day, which could provide insights into future policy rates.

Advertisement

Published February 28th, 2024 at 16:00 IST