08 November,2024 10:41 AM IST | Mumbai | mid-day online correspondent
Representational Pic
In early trading on Friday, the Indian rupee experienced a drop of 5 paise, reaching a historic low of 84.37 against the US dollar. According to PTI, this decline was primarily driven by continuous outflows of foreign funds and a muted trend within the domestic equity markets, highlighting ongoing pressures on the currency.
The rupee opened at 84.32 against the dollar at the interbank foreign exchange and soon fell further to 84.37, marking a 5 paise drop from its previous close. On the preceding day, Thursday, the rupee had already reached a fresh all-time low, ending at 84.32 to the dollar.
According to PTI, forex traders indicated that the recent rate cut by the US Federal Reserve signals significant shifts in the global economic landscape. The Fed reduced its benchmark rate by 0.25 basis points, placing it within a target range of 4.5 to 4.75 per cent. The Fed's accompanying statement adopted a neutral-to-dovish approach, recognising balanced risks associated with inflation and employment. Experts suggest this decision, combined with Donald Trump's tax and trade policies, has contributed to increased volatility, which is likely to impact the rupee's future movements.
Amit Pabari, Managing Director of CR Forex Advisors, shared insights with PTI, noting that attention is now on how effectively the Reserve Bank of India (RBI) navigates this evolving currency scenario. "In such a dynamic environment, only those who adapt swiftly will thrive in the market ahead," Pabari commented. He further noted that the RBI might aim to keep the USD/INR trading within a range of 83.80 to 84.50. Should the dollar lose momentum amid potential future Fed rate cuts, combined with waning investor confidence, Pabari suggested the rupee may strengthen toward the lower end of this range.
ALSO READ
Amid Abhishek Bachchan-Aishwarya Rai divorce, Amitabh shares his thoughts
Global shares mostly slip despite Nvidia's solid earnings report
Stock market today: Asian shares mostly slip despite Nvidia's solid earnings report
Aishwarya shares unseen photos of daughter Aaradhya in late birthday post
Govinda casts his vote in Maharashtra Elections 2024, shares health update
Additionally, the dollar index, which measures the dollar's strength against a set of six major global currencies, rose slightly by 0.02 per cent, standing at 104.53. Meanwhile, Brent crude oil, the benchmark for global oil prices, declined 0.65 per cent to USD 75.14 per barrel in futures trading, according to PTI.
On the domestic equity front, markets mirrored a subdued trend. The Sensex dipped by 14.23 points, or 0.02 per cent, closing at 79,527.56 points. Similarly, the Nifty dropped by 15.45 points, or 0.06 per cent, ending at 24,183.90 points.
As per PTI, foreign institutional investors (FIIs) were net sellers within India's capital markets on Thursday, offloading shares worth Rs 4,888.77 crore. This sustained selling pressure has contributed to the rupee's recent performance, as FIIs redirect funds in response to global developments, potentially impacting domestic financial stability.
Overall, as PTI noted, market observers will be closely monitoring both the RBI's interventions and global economic shifts, as these will likely shape the rupee's future trajectory amidst an increasingly volatile landscape.
(With inputs from PTI)