The Indian rupee opened 3 paise stronger at 85.88 against the US dollar on Thursday, in comparison to its previous close of 85.91 on Wednesday. This slight appreciation comes amid various global and domestic economic factors influencing the currency markets.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, provided insights into the day's trading range and hedging strategies. According to him, the rupee is expected to trade in a range of 85.50 to 86.25.
This comes after the domestic currency weakened by 43 paise to 86.02 against US Dollar on Tuesday, the lowest level since May 23.
"This spike was largely driven by equity outflows and squaring of offshore NDF (Non-Deliverable Forward) positions ahead of RBI MPC and NFP data," said Ritesh Bhanshali, director, Mecklai Financial Service Ltd.
"Rupee has been the worst performer during the year despite a 7.5% growth in GDP in the last quarter taking the full year growth to 6.5%," said Bhansali.
He advised exporters need to hedge near 86 and importers to wait for hedging purposes.
Additionally, the US dollar softened to 98.89 and was stuck near six-week low after weak US economic data revived fears of slow growth and high inflation. However, analysts expect further declines with mounting concerns about the US federal deficit and debt.
The euro was at 1.1412, while the Great British Pound was at 1.3541 and the Japanese Yen was at 142.94. Among Asian currencies, the Chinese Yuan gained to be at 7.1808, the Indonesian Rupiah was at 16,279 and the South Korean Won was at 1,357.
On Thursday, crude extended decline for the second day with Brent crude—the global benchmark for crude oil—falling 0.19% to $64.74 amid signs that Saudi Arabia may take another major production decision at next month's OPEC+ meeting, reported Bloomberg.
Despite being down for two sessions, crude continues to be in positive for the week. It was also up last week as OPEC+ boosted supply, in line with market expectations.
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