Rupee Closes At Over-Two Month High Against US Dollar

The Indian rupee recorded its highest closing against the US Dollar since July 12 as the dollar index struggled near 101.00 level after the US Federal Reserve guided for more rate cuts by the end of 2024.

"Indian Rupee was again on the gaining side as RBI bought dollars intermittently near to 83.4325 and took rupee lower to 83.5475 before closing at 83.53," said Anil Kumar Bhansal, head of treasury and executive director at Finrex Treasury Advisors LLP. " Good inflows has allowed rupee to gain but the gains have been limited by slow buying by the RBI."

On Tuesday, he expects rupee to trade between 83.40 to 83.70 with a sell the dollar on uptick bias.

The local currency ended flat against the US dollar at 83.5450 on Monday, according to Cogencis. Intraday, it rose to 83.4350 a dollar, marking the highest level since July 8. On Friday, the Indian unit closed at 83.5600 a dollar. 

At open, the local currency had strengthened against US Dollar as global funds mopped up Rs 14,000 crore in the cash market, while pocketing Rs 58,500 crore in the derivative market on Friday, to help log in the best week.

The Fed's move triggered expectations of increased foreign inflows, further strengthened by an appreciation in the Chinese Yuan, propelling the rupee higher, said Amit Pabari, managing director, CR Forex Advisors.

The USDINR pair has been hovering around the critical 83.50 level in the onshore market, but has yet to close below it, he said. "A break of this support could pave the way for a swift move towards 83.30, the next key support level, with further potential to reach 83."

The dollar index was down 0.04% at 100.76, while oil prices edged higher after second weekly gain, as tensions escalated between Israel and Hezbollah. 

Indian rupee was on a roll as RBI intervened in the second half of Friday, by buying dollar at 83.47, but not before allowing rupee to gain to that extent, according to Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors. "Today, also, the opening seems to be around 83.47, as RBI steps in to control volatility but not the direction," Bhansali said earlier.