Indian Rupee: Expected To See Some Recovery

7 Jul 2022 , 09:31 AM

Weakness in the US dollar overseas coupled with easing crude oil prices are expected to give rupee the much-needed respite. Rupee, that has been on a downward spiral is likely to pare some of its sharp losses on Thursday, although sustained foreign fund outflows could continue to weigh on the domestic currency. The dollar index, which climbed to a fresh 20-year high at 107.26, is currently down nearly 0.20% at 106.68. Sharp decline in crude oil prices helped cap fall in the Indian rupee on Wednesday that recovered from its all-time low to close 3 paise higher at 79.30 (provisional) against the US dollar. At the interbank forex market, the local unit opened at 79.29 against the greenback and witnessed an intra-day high of 79.24 and a low of 79.37. It finally settled at 79.30, a rise of 3 paise over its previous close. In the previous session, the rupee had closed at an all-time low of 79.33 against the US dollar. Domestic key equity benchmarks ended with strong gains on Wednesday. The barometer index, the S&P BSE Sensex, jumped 616.62 points or 1.16% to 53,750.97. The Nifty 50 index added 178.95 points or 1.13% to 15,989.80. Foreign portfolio investors (FPIs) sold shares worth Rs 330.13 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,464.33 crore in the Indian equity market on 6 July, provisional data showed. Overseas, Asian stocks are mostly higher on Thursday as investors watch for market reaction to the latest Fed minutes. U.S. stocks moved slightly higher on Wednesday as investors pored over the latest minutes from the Federal Reserve. Federal Reserve officials recognized that a ?more restrictive stance? in policy could be suitable if inflation doesnt ease, even if it slows the economy, the meeting minutes said. Fed officials also said a hike of 50 or 75 basis points would be likely at the July meeting. ?Participants recognized that policy firming could slow the pace of economic growth for a time, but they saw the return of inflation to 2 percent as critical to achieving maximum employment on a sustained basis,? the document said. Powered by Commodity Insights