Indian rupee: Likely To Rebound Amid Falling Crude Prices

21 Jan 2022 , 08:45 AM

Sharp decline in crude oil prices coupled with dollar weakness over disappointing US employment figures is likely to augur well for the Indian rupee in opening trades on Friday, 21 January 2022. Nevertheless, skeptical global sentiments ahead of Fed policy next week will weigh on the local currency.

On Thursday, rupee slipped 7 paise to close at 74.51 against the US dollar. At the interbank foreign exchange market, the local currency opened at 74.43 against the greenback and witnessed an intra-day high of 74.29 and a low of 74.53 during the session. The rupee finally settled at 74.51, down 7 paise over its previous close of 74.44.

Domestic equity benchmarks ended with deep cuts on Thursday. The barometer index, the S&P BSE Sensex, tumbled 634.20 points or 1.06% to 59,464.62. The Nifty 50 index lost 181.40 points or 1.01% to 17,757. Foreign portfolio investors (FPIs) sold shares worth Rs 4,679.84 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 769.26 crore in the Indian equity market on 20 January, provisional data showed.

Overseas, Asian stocks are trading lower on Friday, tracking declines on Wall Street overnight. US stocks moved lower on Thursday, giving up their sharp gains from earlier in the session, as Wall Street continues to struggle this year in a rising interest rate environment. Concern that the Federal Reserve will aggressively move to raise rates this year took toll on the market. Investors are anxiously awaiting the U.S. central banks policy meeting next week for new details on how it will tackle inflation.

Meanwhile, the dollar index, which gauges the greenbacks strength against a basket of six currencies, was trading at 95.63 after peaking to 95.86 overnight. US weekly jobless claims for unemployment benefits jumped by 55 thousand from the previous period to 286 thousand in the week ending January 15th amid Omicron wave. Oil prices plunged on Friday, after rising to seven-year highs this week, as an increase in U.S. crude and fuel stockpiles prompted investors to take profits from the rally.

Powered by Commodity Insights