The rupee depreciated 3 paise to close at 83.96 (provisional) against the American currency on Wednesday (August 28, 2024), amidst strong dollar demand from importers, particularly oil companies.
Forex traders said a positive trend in domestic equities, foreign fund inflows and overnight decline in crude oil prices cushioned the downside.
At the interbank foreign exchange market, the local unit opened at 83.94 and touched an intra-day low of 83.97 against the U.S. dollar.
The domestic currency finally settled at 83.96 (provisional), 3 paise lower from its previous close.
On Tuesday (August 27, 2024), the rupee depreciated by 6 paise to close at 83.93 against the American currency.
“We expect the rupee to trade with a slight negative bias on recovery in the US dollar and month-end dollar demand from oil marketing companies (OMCs) and importers,” said Anuj Choudhary— Research Analyst at Sharekhan by BNP Paribas.
Choudhary further noted that a rise in global risk sentiments amid a dovish Fed speech and rising expectations of a rate cut by the U.S. Fed in September may support the rupee.
“Traders may remain cautious ahead of U.S. GDP and core personal consumption expenditures (PCE) data from the U.S. this week.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.36% higher at 100.91.
Brent crude, the global oil benchmark, declined 0.93% to $78.81 per barrel.