Rupee vs Dollar: Despite the recent interest rate cut by the US Federal Reserve (US Fed), the fall of the Indian rupee is showing no sign of stopping. Increasing uncertainties in global markets, continuous withdrawal of foreign capital and increasing demand for US dollars from importers have put deep pressure on the rupee. For this reason, the rupee once again opened with a decline in the interbank foreign exchange market on Thursday and fell by 17 paise to reach a low of 90.11 per dollar.
Dollar strength and risk aversion sentiments
According to Forex traders, the risk-off sentiment remains very strong in the market. Global investors are increasingly turning to safe investment options—such as the US dollar and gold. Due to this, the demand for dollars is increasing further, which has created additional pressure on the Indian currency.
Along with this, the weakness seen in domestic stock markets since few sessions and continuous selling by FIIs is deepening the fall of rupee. On Wednesday alone, foreign investors withdrew Rs 1,651.06 crore from the Indian stock market, which is another negative indicator for the local currency.
Rupee starts weak
On Thursday, the rupee opened at 89.95 in the Interbank Foreign Exchange market, but weakened to 90.11 in early trade, making it clear that the demand for the dollar still remains very strong in the market. This level shows a decline of 17 paise compared to the previous closing price i.e. 89.87.
Meanwhile, the dollar index—which measures the US dollar’s strength against six major world currencies—slipped 0.15% to 98.63. Despite this, the Indian Rupee did not see any relief from this.
There was a rise in the domestic stock market in early trading on Thursday. BSE Sensex reached 84,471.42 with a gain of 80.15 points. NSE Nifty 50 was also trading at 25,792.40, up 34.40 points. However, this strength in the equity market failed to support the rupee as foreign capital outflows still continued.
Crude oil and global signals
In the international market, Brent crude stood at $ 62.35 per barrel with a slight increase of 0.22%. Generally, stability in crude oil prices is a sign of relief for the Indian economy and the rupee, but at this time due to global uncertainties and weak investment sentiment, even its positivity does not seem capable of supporting the rupee.
Market experts say that investors are currently keeping an eye on the US-India trade talks. If there are positive signals from these discussions, then the rupee may gain some strength in the coming days. But as long as selling by foreign investors, demand for dollars and global instability continues, the Indian currency will remain under pressure.
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