Mumbai: The Indian rupee weakened against the US dollar in early trading on Thursday, November 12, as a stronger American currency and rising US Treasury yields pressured emerging market currencies. The domestic currency declined 6 paise to 93.77 against the dollar after opening at approximately 93.73 in the interbank foreign exchange market. On Wednesday, the rupee had appreciated 6 paise to settle at 93.71.
Strong Dollar Pressures Rupee
The US dollar strengthened following higher-than-expected American inflation figures and employment data, which supported Treasury yields. The dollar index, measuring the greenback against six major currencies, advanced 0.12% to 103.03. Persistent inflation concerns have also increased expectations of a possible interest rate increase by the US Federal Reserve in December.
Crude Oil Offers Relief
Declining international crude oil prices provided some support to the Indian currency. Brent crude futures slipped 1.10% to $91.74 per barrel. Lower oil prices generally reduce India's import expenditure and demand for dollars, potentially easing pressure on the rupee.
Forex Experts See Support
Amit Pabari, Managing Director at CR Forex Advisors, believes improving foreign capital inflows and softer crude prices could support the domestic currency. According to his assessment, the USD/INR pair could move towards 93.50, followed by 93.00, if favourable conditions persist. However, further dollar strength could push the exchange rate towards the 94.10–94.30 resistance zone.
Equity Markets Gain
Positive domestic equity markets and foreign institutional investment helped limit currency losses. The Sensex gained 166.44 points to 82,013.58, while the Nifty advanced 55.65 points to 25,316.55 during early trading.
Foreign institutional investors purchased Indian equities worth ₹12,563.33 crore on Wednesday, according to exchange data. Market participants will continue monitoring global inflation trends, Federal Reserve policy expectations, crude oil movements and foreign investment flows for further direction in the rupee-dollar exchange rate.
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