The market witnessed volatility after the US made changes to the fact sheet on its trade agreement with India. The Indian rupee weakened in early trade on Wednesday, the third trading day of the week, amid reports of changes in the document released by the White House a day earlier. Geopolitical tension and increasing demand for the dollar from importers impacted investor sentiment and the rupee fell by six paise to 90.62 against the US dollar.
Rupee falls against dollar
At the Interbank Foreign Exchange Market (IFR), the rupee opened at 90.56 per dollar but later fell to 90.62, six paise lower than its previous closing. However, at one time it strengthened to 90.46 in early trade. On Tuesday, the rupee had increased by 10 paise and closed at 90.56 per dollar. Meanwhile, the dollar index, which shows the US dollar’s position against six major currencies, fell 0.14 per cent to 96.66.
Domestic stock markets opened positive. In early trade, BSE Sensex rose 141.21 points to 84,415.13, while Nifty was trading 51.95 points higher at 25,987.10. Meanwhile, Brent crude oil prices in the international market increased by 0.78 percent to $69.34 per barrel. Foreign investor sentiment also improved. So far this month, foreign investors have invested about $2 billion in the Indian market. According to stock market data, on Tuesday, foreign institutional investors (FIIs) bought shares worth ₹69.45 crore.
What are experts saying?
Experts believe that the further movement of the rupee will depend on many factors. According to Anuj Chaudhary, Research Analyst, Mirae Asset Sharekhan, the rupee may trade positive due to the strength of the domestic market and expectations of a trade deal. A weak dollar and new foreign investment inflows can also support it. However, geopolitical tension and dollar demand from importers may restrict its growth. He estimated that the spot dollar-rupee rate could remain in the range of 90.30 to 90.80. HDFC Securities Research Analyst Dilip Parmar said strong investor sentiment and withdrawal of foreign investment are supporting the rupee.
