The rupee on June 16, recovered from its record low to twelve paise higher at 78.10 (provisional) against the American dollar, tracking the overnight weakness of the dollar and falling crude oil prices.
After the Federal Reserve raised interest rates by 75 basis points, the dollar index fell from its elevated levels. The move by the Federal Bank was aimed towards fighting inflation. It projected a slowing economy and rising unemployment in the months to come, Forex traders said.
At the interbank forex market, the rupee opened at 78.06 against the greenback and moved in a narrow range. It finally ended at 78.10, higher by 12 paise over its previous close.
On Wednesday, June 15, the rupee plunged eighteen paise to close at a new all-time low of 78.22.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.13 per cent to 105.02.
Brent crude futures, the global oil benchmark, fell 0.25 per cent to USD 118.21 per barrel.
Dilip Parmar, Research Analyst, HDFC Securities said , “Even after higher trade deficit numbers, weaker regional currencies and risk-averse sentiments, the rupee got support from the fall in crude oil prices.”
Parmar further noted that some relief rally in the rupee in the near-term is likely but odds of 78.50 are very much alive.
“As the FOMC event is over, the focus will shift back to fund flows and risk moods for rupee movements,” Parmar said. He added that The spot USD-INR is expected to consolidate in the range of 77.70 to 78.30 before heading north.
On the domestic equity market front, the BSE Sensex ended 1,045.60 points or 1.99 per cent lower at 51,495.79, while the broader NSE Nifty plunged 331.55 points or 2.11 per cent to 15,360.60.
Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 3,531.15 crore, as per stock exchange data