Updated February 20th, 2024 at 19:04 IST

Rupee inches up amid importer demand, eyes on Fed minutes

Closing at 82.9625 against the dollar, the rupee marked a marginal gain of 0.06 per cent compared to its previous close at 83.0150.

Reported by: Business Desk
Rupee logo | Image:Freepik
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The Indian rupee saw a slight uptick against the US dollar on Tuesday, buoyed by potential inflows but constrained by importers' demand for the greenback, as reported by traders.

Closing at 82.9625 against the dollar, the rupee marked a marginal gain of 0.06 per cent compared to its previous close at 83.0150. Despite touching an intra-day high of 82.9225, the currency relinquished some of its gains towards the end of the session, primarily due to increased demand for the dollar from importers, including local oil companies.

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Meanwhile, the dollar index dipped to 104.16, contributing to the rupee's upward momentum. However, most Asian currencies experienced weakening trends, with the Thai baht notably leading the losses.

The Indian rupee's performance was supported by anticipated dollar inflows, as highlighted by a foreign exchange trader at a private bank. Nevertheless, the currency faced resistance near the 82.90 levels due to heightened demand for dollars from importers, thereby limiting its gains.

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The Chinese yuan initially weakened following China's decision to reduce its benchmark mortgage rate. However, major state-owned banks intervened by selling dollars to stabilize the currency.

Commenting on China's monetary easing measures, ING Bank noted that while they typically impact the property market significantly, market response remained subdued.

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Looking ahead, market participants will closely monitor the release of the minutes from the US Federal Reserve's latest policy meeting scheduled for Wednesday's US trading hours. Additionally, investors will scrutinize remarks from Fed officials for insights into future policy rate decisions.

Amit Pabari, managing director at FX advisory firm CR Forex, observed that the rupee is likely to trade within a narrow range, with the potential for further appreciation if it surpasses the 82.80 threshold.

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Amidst importer demand and global market dynamics, the trajectory of the Indian rupee remains subject to evolving economic indicators and central bank actions, shaping investor sentiment and currency movements in the coming sessions.

(With Reuters inputs)

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Published February 20th, 2024 at 16:38 IST