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Updated January 4th, 2024 at 10:55 IST

Rupee dips slightly amid decline in Asian peers

At 10:25 am, the Rupee stood at 83.3050 against the US Dollar, marking a 0.04% dip from its previous close of 83.2750.

Business Desk
Rupee weakens on Dollar demand from oil companies and foreign banks
Rupee weakens | Image:Republic World
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Rupee declines marginally: Rupee experienced a marginal weakening on Thursday, influenced by the downturn in its Asian counterparts and subdued risk sentiment. At 10:25 am, the Rupee stood at 83.3050 against the US Dollar, marking a 0.04 per cent dip from its previous close of 83.2750.

The Dollar index edged up to 102.45, marking a 1 per cent increase in January. This follows consecutive monthly declines in November and December. The recent resurgence of the Dollar is attributed to a moderation in bets on potential rate cuts in the US, with investors now pricing in a 27 per cent chance that the Federal Reserve will maintain rates at its March meeting.

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Minutes from the Fed's December policy meeting indicated policymakers' contentment with inflation control progress, although they offered limited insight into the timing of potential rate cuts.

Market analysts suggest the Rupee is likely to remain within its existing narrow range, influenced by the Reserve Bank of India's proactive stance in the currency market. A senior FX trader noted, "It's one big player who is running the market. Now if inflows come in, they will come to buy (Dollars)... if outflows come, they will come to sell."

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In December, monthly portfolio inflows into India reached a record high of $10.1 billion. Despite this, the Rupee closed the month only marginally stronger. According to Amit Pabari, Managing Director at FX advisory firm CR Forex, "The Rupee's fundamentals indicate resilience," emphasising the strong resistance range between 83.30-40 for the pair.

On the broader Asian front, most currencies experienced a dip on Thursday, with the Thai baht leading losses with a 0.3 per cent decline. Investors are now awaiting US initial jobless claims data later in the day, followed by the highly anticipated non-farm payrolls and unemployment data on Friday.

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(With Reuters inputs.)

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Published January 4th, 2024 at 10:46 IST

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