In early trade on Thursday, the rupee depreciated by 7 paise against the US dollar, settling at 88.69. A strong US dollar index and a sluggish domestic stock market impacted investor sentiment.
Foreign exchange traders said the rupee was trading in a narrow range, with new optimism regarding the US-India trade talks providing it with some support. In contrast, a stable US dollar index has influenced investor sentiment.
The US dollar index hovered around 99.50, as markets prepared for the final chapter of the US government shutdown saga.
In the interbank foreign exchange market, the rupee opened at 88.66 against the US dollar and then slipped to 88.69, 7 paise lower than the previous closing. On Wednesday, the rupee had closed at 88.62, down by 12 paise.
Amit Pabari, MD of CR Forex Advisors, stated, “The dollar/rupee pair is getting strong support at 88.40. A continued fall below this level could open the path to 87.70-88.00, signaling further strength for the rupee. On the upside, resistance lies at 88.70-88.80.”
Meanwhile, the Dollar Index, which measures the strength of the US dollar against six major currencies, rose by 0.02 percent, trading at 99.51.
Global oil benchmark Brent crude futures were trading at $62.63 per barrel, down by 0.13 percent.
In the domestic stock market, the Sensex fell by 205.08 points to 84,261.43, while the Nifty dropped by 61.15 points to 25,814.65.
According to exchange data, Foreign Institutional Investors (FIIs) sold shares worth ₹1,750.03 crore on Wednesday.
Meanwhile, the government approved an export promotion mission (EPM) with a budget of ₹25,060 crore for the next six financial years, starting from this fiscal year. This initiative aims to help exporters tackle the high tariffs imposed by the US.
