Rupee Strengthens On Cooling Dollar As Investors Await US CPI Data
Rupee strengthened by 2 paise to open at 83.94 against the US dollar on Thursday, up from its Wednesday close of 83.96.
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The Indian rupee opened stronger on Thursday as the dollar index cooled, with investors awaiting key US CPI inflation data.
The currency strengthened by 2 paise to open at 83.94 against the US dollar on Thursday, up from its Wednesday close of 83.96, according to Bloomberg.
The dollar index, which had risen 0.37% in the previous session following the release of the Federal Reserve's September meeting minutes, is now down 0.06% at 102.8630. The minutes revealed that Fed Chair Jerome Powell faced pushback on the half-point interest rate cut, with some officials advocating for a smaller, quarter-point reduction.
On the crude front, Brent oil prices rose by 0.77% to $77.17 per barrel in early Asian trade, driven by concerns over potential supply disruptions in the Middle East as Israel plans to strike oil-producing Iran. Additionally, Hurricane Milton, which made landfall on Florida's west coast, further fuelled demand spikes in the world's largest oil-consuming nation.
The rupee traded within small ranges as the RBI continued to protect it from weakening beyond the 84 mark, noted Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.
“FPIs continued selling in the equity markets and bought dollars for outflows, keeping the rupee stable. Today’s opening at 83.95, with a range of 83.85 to 84.05, is positive, especially with Adani Enterprises’ $500 million QIP launched on October 9," Bhansali said.
He also highlighted that the US dollar hovered near a two-month peak as expectations of further easing by the Federal Reserve ebbed ahead of Thursday’s US CPI and jobless claims data.
“The dollar index hit 102.85, reflecting confidence in the Fed’s patient approach to monetary easing. The US dollar's strength is largely supported by continuous economic outperformance,” he added.
Bhansali forecasts the rupee’s range for the day to be between 83.85 and 84.05. He advises exporters to sell on upticks as the RBI maintains support at 83.99, while importers should look to buy on dips, with a stop loss set at 84.02 for unhedged imports.
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