The Indian rupee ended slightly higher on Wednesday, settling with a two paise gain at 88.58 per US dollar, supported by mild foreign inflows and a stable domestic equity market.
The local currency opened at 88.57, strengthened further during the session, and touched an intraday high of 88.41, reflecting improved sentiment in the forex market.
Although the appreciation was modest, it signals a brief recovery amid global currency volatility.
What Drove the Rupee’s Mild Gains?
1. Stable Domestic Equities
Indian stock markets traded with positive momentum, helping boost foreign investor confidence.
2. Softening Dollar Index
The US dollar saw slight weakness against major currencies, giving emerging market currencies like the rupee some breathing room.
3. Lower Crude Oil Prices
Oil prices remained steady, reducing pressure on India’s import bills — a major support factor for the rupee.
4. Foreign Inflows in Select Sectors
Mild FPI inflows in debt and equity markets also contributed to the rupee’s appreciation.
Intraday Movement Snapshot
Opening: 88.57
High: 88.41
Close: 88.58
The rupee showed resilience despite global uncertainties, narrowing losses seen earlier this month.
Global Factors Influencing the Rupee
1. US Treasury Yield Movements
Fluctuating yields continued to drive global currency trends, affecting dollar strength.
2. Federal Reserve Commentary
Expectations of slower US interest rate hikes helped emerging market currencies.
3. Geopolitical Developments
Volatility due to ongoing global tensions kept traders cautious.
Outlook for the Rupee
Analysts believe the rupee may continue to trade in a tight range due to:
Mixed global cues
Crude oil price swings
Awaited US economic data releases
RBI’s calibrated intervention approach
The near-term outlook remains range-bound but stable.
FAQs
1. Why did the rupee strengthen today?
Due to stable equities, a softer dollar, and some foreign inflows.
2. What was the rupee’s intraday high?
88.41 against the US dollar.
3. Is this gain significant?
It’s a mild gain, but important given global currency volatility.
4. What global factors affect the rupee?
US dollar strength, crude oil prices, Treasury yields, and geopolitical events.
5. Will the rupee strengthen further?
It may remain range-bound with slight upward or downward movements depending on global cues.
Published on : 19th November
Published by : SMITA
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Source Credit: Content based on report from PTI.