Business Standard

Rupee recovers from all-time low, rises 2 paise against US dollar

Forex traders said investors were cautious ahead of the US presidential election. Markets are bracing for potential volatility over the coming days

rupee bond

On Monday, the rupee fell 4 paise to close at a record low level of 84.11 against the US dollar.

Press Trust of India

Listen to This Article

The rupee recovered from its all-time low to settle 2 paise higher at 84.09 against the US dollar on Tuesday, supported by a recovery in the domestic markets and suspected intervention by the Reserve Bank of India. 
Forex traders said investors were cautious ahead of the US presidential election. Markets are bracing for potential volatility over the coming days, especially with the Federal Reserve's monetary policy announcement also scheduled this week. 
At the interbank foreign exchange, the rupee opened at 84.13 against the US dollar. During the session, the local currency oscillated between a high of 84.09 and a low of 84.13. It finally settled at 84.09, a gain of 2 paise against its previous close. 
 
On Monday, the rupee fell 4 paise to close at a record low level of 84.11 against the US dollar. 
"Indian rupee touched fresh record lows amid uncertainty over US elections and FII outflows. Elevated crude oil prices also weighed on the rupee. However, weak US Dollar and positive domestic markets prevented a sharp fall in the rupee," said Anuj Choudhary – Research Analyst at Sharekhan by BNP Paribas. 
Choudhary further said the rupee is likely to trade with a negative bias on FII outflows and overall strength in the US Dollar.  Elevated crude oil prices may also mount pressure on the rupee. However, a recovery in the domestic markets and any intervention by the RBI supported the rupee at lower levels. 
"We could see some volatility ahead of the US Presidential election results. Traders may take cues from trade balance and ISM services PMI from the US and FOMC meeting outcome later this week. $/INR spot price is expected to trade in a range of 83.95 to 84.30," Choudhary added. 
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.13 per cent lower at 103.73. 
Brent crude, the global oil benchmark, rose 0.63 per cent to $ 75.55 per barrel in futures trade. 
"The RBI was present the whole day at 84.1250 and did not allow the $/INR pair to buzz past 84.13, which is the intra-day low for the rupee. European currencies were also slightly up, taking EUR/INR and GBP/INR slightly higher since the morning lows up by about 20 paise. The range for tomorrow is expected between 83.80 to 84.20," Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP, said. 
In the domestic equity market, the 30-share BSE Sensex surged 694.39 points, or 0.88 per cent, to close at 79,476.63, while Nifty advanced 217.95 points, or 0.91 per cent, to settle at 24,213.30. 
Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday as they offloaded shares worth Rs 2,569.41 crore, according to exchange data. 
Meanwhile, India's manufacturing sector growth recovered from September's eight-month low to 57.5 in October, fuelled by faster increases in total new orders and international sales, a monthly survey said on Monday.   
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
 

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Nov 05 2024 | 9:39 PM IST

Explore News