Rupee recovers from record low to settle 4 paise higher at 85.87 against U.S. dollar
The Hindu
Rupee gains 4 paise against dollar amid firm American currency, high crude oil prices, and FII outflows.
The rupee recovered slightly from its record low and settled with a gain of 4 paise at 85.87 (provisional) against the U.S. dollar on Thursday (January 9, 2025) amid firm American currency and elevated level of crude oil prices.
According to forex analysts, relentless selling in domestic equities and outflow of foreign capital kept the local unit under pressure, while dollar strengthened on improved macroeconomic prospects in the U.S.
They said, uncertainties related to trade restrictions ahead of the change in US administration under President Donald Trump continued to fuel dollar demand, while concerns over Federal Reserve's move to delay interest cut kept the country's benchmark treasury yields elevated.
At the interbank foreign exchange, the rupee opened at its historic low level of 85.94 and touched an intra-day peak of 85.84 before ending the session at 85.87 (provisional) against the greenback, 4 paise higher from its previous close.
On Wednesday, the rupee plunged 17 paise to settle at its all-time low closing level of 85.91 against the dollar.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the surge in US bond yields and FII outflows pressured the rupee. The US macroeconomic data was mixed, with weekly unemployment claims favouring the greenback while non-farm employment data was disappointing.
"We expect rupee to trade with a negative bias on weak domestic markets, strong dollar and rising US treasury yields. Elevated crude oil prices and FII outflows also put downside pressure on the domestic currency. However, any RBI intervention may support rupee at lower levels. Investors may watch out for non-farm payrolls report. USD-INR spot price is expected to trade in a range of Rs 85.75 to Rs 86.10," Choudhary said.
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Rupee hits record low against dollar due to strengthening American currency, higher crude oil prices, and subdued domestic markets.