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Forex traders say strength of dollar in overseas market, elevated crude oil prices weigh on local unit and restrict appreciation bias

Forex Traders Cite Overseas Strength of Dollar, Dampening Investor Sentiment

The unit moved in a range of 83.23 to 83.33 in morning deals.

Apart from demand, it’s the actual traders who make the greenback powerful and most sought-after currency

Brent crude futures, the global oil benchmark, advanced 0.41 per cent to USD 90.02 per barrel.

The US dollar is on track for its eighth consecutive week of gains against a basket of major currencies, marking its strongest performance since the winter of 2014-2015. According to CNN, it has surged by 5% since mid-July.

Indian benchmark indices felt the heat with major corrections seen of around 2.50 per cent in the last two days keeping rupee at lower levels, Jateen Trivedi, VP Research Analyst said

Sustained foreign fund inflows supported the local unit and contained the fall.

An upward movement in crude price also weighed on the local unit, forex traders said.

At the interbank foreign exchange, the domestic unit opened at 82.29 against the dollar, then fell to 82.35, registering a decline of 10 paise over its last close.

Forex traders said the rupee is trading in a narrow range as the support from crude oil prices below USD 80 a barrel was negated by muted domestic equities.

At the interbank foreign exchange, the domestic unit opened weak at 81.95 against the dollar, registering a decline of 5 paise over its last close. In initial trade, the local unit also saw a high of 81.88 against the greenback.

BSE Sensex rose by 123.64 points or 0.21 per cent to 57,737.36 while NSE Nifty gained 53.70 points or 0.32 per cent to 17,005.40 in early trade.

The war in Ukraine is a result of the continuation of murky aggression — a clash of two powers, backed by Western oligarchs on the one hand and Russian’s on the other

In initial trade, the rupee also touched a low of 82.61 against the American currency

Early losses in domestic stock markets and a rebound in oil prices, however, restricted the rupee's gains.

The downward spiral of the Indian rupee could hit the industry hard, especially production segments where imports are a crucial component.

He also noted that this tendency pushes Russia and many other nations to switch to other currencies, most notably the Chinese yuan.

Rupee opened at 80.1 and fell to its all-time low of 80.15 against the US dollar in intra-day trade. It settled at 79.94 a dollar, down 10 paise over its previous close of 79.84.

While rising inflation, tightening monetary policy, and climbing crude oil prices have made the current fiscal a difficult one for the INR, the Russia-Ukraine war sparked a near-freefall.