The Rupee has maintained its strength for the third consecutive day.
The US Dollar index, which gauges the dollar’s strength against a range of global currencies, has increased by 0.14% over the past month, now standing at 101.32, up from 101.19 a month earlier.
Meanwhile, oil prices are back in focus, exerting pressure on currencies. The price of Brent Crude has surged once more, climbing to $87.55, marking an increase of $3.46 or 4.11%.
On Dalal Street, the equity markets are showing signs of a positive start for the day’s trading activities.
Conversely, Asian markets are experiencing significant strain, with South Korea’s KOSPI dropping 7% as a semiconductor sell-off dampens the recent rally.
Moreover, attention is also on the upcoming FOMC meeting of the US Fed. The Fed’s assessment of inflation, influencing its rate decision and forthcoming comments, may be swayed by the recent fluctuations in crude prices.
According to a Reuters report, the recent recovery of the Indian rupee may face hurdles on Wednesday due to changing crude oil prices and persistent concerns surrounding Federal Reserve interest rates that could undermine the positive trend. Over the last three trading sessions, the currency has reportedly received support, likely from the Reserve Bank of India’s interventions, which traders believe will continue to strengthen the rupee. However, the volatility in oil prices and the likelihood of a hawkish outlook from the Fed may challenge this recovery, traders noted.
The rupee is expected to open marginally higher but might encounter pressure as the trading session unfolds. On Tuesday, it closed at 95.8525 per US dollar.
At present, the RBI plays a pivotal role in stabilizing the rupee, as observed by a currency trader at a bank. He asserts that the RBI’s involvement will continue to be a crucial support mechanism, particularly in light of its recent trend of intervening around the market opening.
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(Edited by : Juviraj Anchil)
