The Indian rupee has continued its upward trajectory, appreciating by 4 paise to reach 83.14 against the US dollar in early trade on Thursday.
This marks the third consecutive day of gains for the rupee. Several factors are influencing the currency’s performance:
- Easing Crude Oil Prices: The rupee’s strength can be attributed to the recent easing of crude oil prices, which positively impacts India, a major oil importer.
- Weaker US Dollar: A weak US dollar contributes to the rupee’s gains. The American currency’s relative weakness in the foreign exchange market favors the rupee.
- Domestic Equity Market Sentiments: While the rupee is strengthening, subdued sentiments in the domestic equity markets are restraining. Concerns over foreign fund withdrawals are also having an impact.
Rupee’s Performance in Early Trade:
The rupee opened at 83.17 against the US dollar at the interbank foreign exchange. It traded within the range of 83.13 to 83.17, eventually settling at 83.14 against the greenback. This represents a 4 paise gain from its previous close.
Economic Data and Rate Hike Expectations:
India’s inflation data is set to be released after market hours. The consumer inflation index (CPI) in the United States is expected to rise by 0.3% month-on-month.
The core measure is also anticipated to increase at the same pace. These economic indicators are crucial for understanding the monetary policy landscape.
Investors have adjusted their expectations for a Federal Reserve rate hike, with the probability of such an action at the next meeting falling to less than 10%.
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