Rupee's Minor Gain Against US Dollar Amid Ongoing Market Pressures

Tuesday, 22 October 2024, 21:21

Rupee trades at 84.07 against US dollar, showing only a slight gain. The forex market grapples with foreign fund outflows and a weakening equity market, emphasizing uncertainty.
Mid-day
Rupee's Minor Gain Against US Dollar Amid Ongoing Market Pressures

Forex Market Dynamics

The Indian rupee traded just 1 paisa higher at 84.07 against the US dollar in early trade on Wednesday, reflecting negligible movement amidst persistent market pressure. Despite this minor gain, analysts note the currency remains under strain from a strong US dollar and ongoing foreign fund outflows.

Impact of Foreign Institutional Investors

  • The rupee struggled to rebound due to considerable selling by foreign institutional investors (FIIs), who are shifting investments toward more favorable markets like China.
  • Foreign fund outflows have significantly impacted the rupee's stability in recent sessions.

US Dollar Strength and Crude Oil Prices

In a related note, the dollar index rose slightly by 0.06% to 103.97, adding pressure on the rupee. Brent crude prices, despite slight declines today, continue to influence the rupee negatively with historic highs.

Domestic Equity Market Performance

Our domestic equity market faced notable declines, with both BSE Sensex and NSE Nifty trending downward. These trends further emphasize the challenges facing the rupee in maintaining ground amidst investor hesitation.

  1. BSE Sensex fell 96.34 points (0.12%) to 80,124.38.
  2. NSE Nifty dropped 32.95 points (0.13%) to 24,439.15.

While the rupee registered a slight increase in early trading, the combination of external pressures from foreign fund outflows and a strong US dollar suggests that significant recovery in the near term remains unlikely.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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