Rupee moves in narrow range against US dollar in early trade

Forex traders said the rupee is likely to trade in a narrow range during the day as the strong dollar weighs on the local unit and rising crude oil prices dragged down the local unit

The rupee witnessed range-bound trade and appreciated by just 1 paisa to 84.06 against the US dollar in initial deals on Monday (November 4, 2024) weighed down by persistent foreign fund outflows and a muted trend in domestic equities.

Forex traders said the rupee is likely to trade in a narrow range during the day as the strong dollar weighs on the local unit and rising crude oil prices dragged down the local unit, while any intervention by the Reserve Bank of India (RBI) may also support the local currency at lower levels.

At the interbank foreign exchange, the rupee opened at 84.07 against the greenback. In the initial trade, it touched 84.06, registering a rise of 1 paisa over its previous close.

On Thursday (October 31, 2024), the rupee edged up 1 paisa to 84.07 against the US dollar.

The Forex market remained closed on Friday on account of Diwali.

The local currency has been hovering around its all-time low level. It touched its lowest closing level of 84.10 against the dollar on October 11, 2024.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.62 per cent lower at 103.63.

Brent crude, the global oil benchmark, rose 1.52% to $4.21 per barrel in futures trade.

Last week saw a relatively quiet period in India due to Diwali celebrations, with low volatility and limited market movement. The USD-INR pair continued to trade within a familiar range, as the RBI effectively capped the upside at the 84.10 level, CR Forex Advisors Managing Director Amit Pabari said.

This week, however, brings heightened interest as a lineup of IPOs unfolds, with Swiggy's anticipated listing in the spotlight as it aims to raise $1.3 billion. This could lend some support to the rupee, with expectations for the USD-INR pair to trade within a range of 83.80 to 84.20, with a downside bias.

On the domestic equity market front, Sensex declined 703.89 points, or 0.88%, to 79,020.23 points. The Nifty fell 214.60 points, or 0.88%, to 24,089.75 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth ₹ 211.93 crore, according to exchange data.

Meanwhile, India's forex reserves dropped by $3.463 billion to $684.805 billion in the week ended October 25, the RBI said on Friday (November 1, 2024).

The overall reserves had dropped by $2.163 billion to $688.267 billion in the previous reporting week. In end-September, the reserves had hit an all-time high of $704.885 billion.

Published - November 04, 2024 11:28 am IST