Rupee Closes Stronger Against US Dollar
The local currency appreciated two paise to close at Rs 83.38 against the greenback.
The Indian rupee closed stronger on Tuesday even as the US dollar index surged to an over four-month high.
The local currency appreciated two paise to close at Rs 83.38 against the greenback. It had closed at Rs 83.40 a dollar on Thursday, according to Bloomberg data.
"Market participants are trimming their bets on Fed rate cuts, optimistic ISM and S&P Global reports resulted in (a) surge in US Treasury yields and dollar index," said Kunal Sodhani, vice president of Shinhan Bank. "Dollar index broke (the) crucial resistance of 104.85 and now test 105.60 levels. Brent crude prices (are) on the rise too."
The rupee weakness has been observed only during significant events like geopolitical strains, financial meltdown, abrupt spikes in gold prices due to risk or substantial dollar strength—circumstances that are not prevalent currently. The 10-year US Treasury bond yields are also controlled, signifying no caution, according to Amit Pabari, managing director at CR Forex Advisors.
"Therefore, we expect fundamental economic factors to exert greater influence on the currency, potentially driving appreciation towards levels ranging from Rs 83.00 to Rs 82.90," Pabari said.
