Rupee Continues To Gain As It Opens Stronger Against US Dollar
Rupee's expected trading range for the day is 84.75 to 85.50.
The Indian Rupee opened 28 paise stronger at 85.07 against the US Dollar on Wednesday, following its previous close at 85.35 a dollar on Tuesday, according to Bloomberg.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, noted that the expected opening for the INR was around 85.05. "Exporters can hedge at 85.40-50, while importers may wait to hedge near 84.25-50," he said.
Brent oil prices held near a two-week high at $66.19 per barrel, supported by the agreement between the US and China to temporarily lower their reciprocal tariffs and a falling US dollar.
Rupee's expected trading range for the day is 84.75 to 85.50.
The dollar index fell to 100.97, dropping 0.67% after data showed that US inflation was lower than expected. Prices had climbed by $1.60 per barrel on Tuesday, supported by the agreement and a weaker dollar. The market was also buoyed by reported declines in US gasoline and distillate inventories, indicating resilient fuel demand, Bhansali noted.
The S&P 500 and Nasdaq ended higher on soft inflation data, adding to investor optimism following the US-China agreement. However, the Dow fell by 0.67%. If inflation remains subdued and trade policies stabilise, the Federal Reserve may resume rate cuts on July 25, Bhansali added.
India's inflation rose by 3.16%, lower than last month and almost in line with expectations, he noted. This could provide the Reserve Bank of India another opportunity to cut rates in its scheduled meeting next month. The Indian Rupee fell yesterday due to buying from foreign portfolio investors, oil companies, government repayment of interest, defence payments, mid-month demand, and importers hedging. The fall reached up to 85.47 before closing at 85.33.
