The dollar index, which measures the strength of the US dollar against a selection of six currencies, was slightly up by 0.04% at 106.70.
In the morning session on Wednesday, the Indian rupee lost 2 paise against the US dollar, influenced by a strong US dollar in international markets and a lackluster performance in domestic equities. The rupee’s opening rate was 83.27 per dollar, which was 2 paise lower than the previous day’s closing rate of 82.25.
The US dollar index, measuring the dollar’s strength against a basket of six other currencies, was up by 0.04% at 106.70.
On the previous day, the rupee had settled at 83.25 against the US dollar.
Forex traders noted that the Indian rupee was under pressure due to continuous outflows of foreign funds.
Amit Pabari, Managing Director of CR Forex Advisors, pointed out an unusual trend in the USD/INR pair in October. Despite various global events like the Israel-Palestine conflict, a strong US Dollar Index (US DXY), and elevated US 10-year bond yields, the interbank rate remained relatively stable, hovering around 83.25 for most of the month, with minor fluctuations of just one or two paise above or below this level.
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“It’s essential to remember that lower volatility often signals a contrary opinion, indicating the potential for increased volatility in the near future,” Pabari added.
Global oil benchmark Brent crude futures eased 0.05% to $87.41 per barrel.
Meanwhile, the central government’s fiscal deficit touched 39.3% of the full-year target in the first half of the current financial year, slightly higher than 37.3% recorded in the year-ago period.
The growth of eight key infrastructure sectors slowed down to a four-month low of 8.1% in September 2023 against 8.3% a year ago, according to the official data released on Tuesday.
On the domestic equity market front, BSE Sensex was trading 124.76 points, or 0.20%, lower at 63,750.17, while the broader NSE Nifty declined 31.10 points, or 0.16%, to 19,048.50.
Foreign institutional investors were net sellers in the capital market on Tuesday as they offloaded shares worth ₹696.02 crore, according to exchange data.
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