India News | Rupee Recovers from All-time Low, Gains 6 Paise to 85.07 Against US Dollar in Early Trade
Get latest articles and stories on India at LatestLY. The rupee saw some recovery from its all-time low level and appreciated 6 paise to 85.07 against the US dollar in early trade on Friday.
Mumbai, Dec 20 (PTI) The rupee saw some recovery from its all-time low level and appreciated 6 paise to 85.07 against the US dollar in early trade on Friday.
Forex traders said the rupee is likely to remain in a weakening mode due to significant dollar demand. The Dollar Index (DXY) is expected to remain elevated, with resistance near the 110 level in the near-term amid a reduced likelihood of significant Fed rate cuts in 2025.
The Federal Reserve cut rates by 25 basis points on Wednesday, but its forward guidance for 2025 has softened, with expectations reduced from four rate cuts to just two.
At the interbank foreign exchange, the rupee opened at 85.07, registering a gain of 6 paise from its previous close. It was later trading at 85.10 against the greenback, a tad above the all-time low level.
On Thursday, the rupee depreciated 19 paise and breached the crucial 85 level to close at a fresh all-time low of 85.13 against the US dollar.
"The Indian rupee is facing headwinds from both global and local factors. As the Federal Reserve's decision to adopt a cautious approach toward rate cuts in 2025 triggered a more than 1 per cent correction in Indian equities.
"While on the domestic front, the Reserve Bank of India (RBI) appears constrained in its ability to intervene as effectively as earlier this year, partly due to tightening banking system liquidity," CR Forex Advisors MD Amit Pabari said.
As a result, the USDINR pair has breached the 85.00 mark. In the near-term, the pair is likely to consolidate within a range of 84.70 to 85.20, he said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.03 per cent at 108.43.
Brent crude, the global oil benchmark, fell 0.62 per cent to USD 72.43 per barrel in futures trade.
On the domestic equity market front, the 30-share benchmark index Sensex was trading 145.13 points, or 0.18 per cent lower at 79,072.92 points. The Nifty was down 17.40 points, or 0.07 per cent, to 23,934.30 points.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Thursday, as they offloaded shares worth Rs 4,224.92 crore, according to exchange data. PTIR
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