The Indian rupee opened paise 7 higher against the US dollar on Wednesday amid a drop in American currency and pullback in crude oil prices. The local currency opened at 83.20 a dollar as compared to Monday’s close of 83.27.
The US dollar remained firm but softened slightly against the yen ahead of the interest rate decision by the US Federal Reserve later in the day. The US dollar index, which measures the greenback against a basket of rivals, stayed mostly flat at 105.13, Reuters reported.
On Monday, the rupee depreciated 8 paise to end at a record closing low of 83.27 a dollar. The local currency is within a whisker of the lifetime low of 83.29.
The US Fed is widely expected to keep rates on hold at 5.25% to 5.50%, while focus will remain on the central bank’s forward guidance.
The yen was nearly 0.1% higher at 147.77 versus the greenback. The Australian dollar rose almost 0.1%, while the New Zealand dollar gained 0.2% against the dollar near $0.5950. The euro and sterling stood mostly unchanged in the Asian morning, at $1.0680 and $1.2391 respectively, Reuters reported.
“USDINR is expected to face the hurdle near 83.45 and move back towards 83.10 amid softness in dollar. The growing optimism of Fed pause in its next policy could restrict its upside. However, more focus will be on guidance from central banks to get clues on the future rate trajectory,” ICICI Direct said in a note.
The brokerage firm expects USDINR to remain in the range of 83.10 – 83.45. only a move above 83.45 would open the doors towards 83.60, it said.
Crude oil prices declined from near 10-month highs hit the previous day amid fears of tight crude supply for the rest of 2023.
Brent futures fell 0.89% to $93.50 a barrel, while US West Texas Intermediate (WTI) crude dropped 0.82% to $90.45 a barrel.
On the domestic front, the Indian stock market indices Sensex and Nifty were trading lower in the pre-opening session.
On Monday, the Foreign institutional investors (FIIs) net sold Indian shares worth ₹1,236.51 crore, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹552.55 crore, as per provisional data available on the exchanges.
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(With inputs from Reuters)
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Updated: 20 Sep 2023, 09:21 AM IST