Rupee Strengthens On Weaker Dollar After US Jobless Claims Fall
The weekly claims data fell to the lowest since May and below the estimates.
The Indian rupee opened six paise stronger at 83.63 against the US dollar on Friday, up from its previous close of 83.69, according to Bloomberg data.
This comes as the US dollar index dipped by 0.07% and Brent crude oil prices fell by 0.16% to $74.02 per barrel as of 9:22 am, providing a supportive backdrop for the rupee.
The currency gained early momentum following the release of US jobless claims data on Thursday, which showed a decline to 2.19 lakh in September, the lowest since May and below the estimated 2.3 lakh claims.
"The RBI seems to have loosened it's iron grip on the USD-INR pair as it allowed rupee to gain up to 83.56 before it bought dollars to allow a closure at 83.68," said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Despite favourable conditions such as lower global crude prices, improving domestic fundamentals, and stronger Asian currencies, the RBI has kept the rupee in a tight band below 83.90, preventing it from crossing the psychological level of 84.00, he added.
“With rate cuts in the US, inflows into India are expected to increase. The RBI may not absorb all these inflows, potentially allowing some rupee appreciation,” Bhansali said.
The pair shows strong support around 83.50 and if breached, we could see it move toward 83.20 to 83.30, said Amit Pabari, Managing Director of CR Forex Advisors. "Until then, the pair is likely to trade within the 83.50 to 83.75 range if the RBI continues managing the flows,” he added.
