Indian Rupee: Rising Crude Oil Prices Likely To Weigh

7 Jan 2022 , 09:06 AM

Rising international crude oil prices is expected to drag rupee sentiments lower in opening trades on Friday, 07 January 2022. Besides, foreign funds reversing faith in the domestic equities after investors saw minutes from the Federal Reserve meeting as a sign that the US central bank might hike interest rates faster than anticipated to cool inflation could further weigh down the local currency.

On Thursday, rupee dipped 4 paise to close at 74.42 against the US dollar, tracking the strength of the greenback in the overseas market after hawkish US Fed minutes. At the interbank foreign exchange market, the rupee opened weak at 74.44 and witnessed an intra-day high of 74.32 and a low of 74.51 against the US dollar. The domestic unit finally settled at 74.42, down 4 paise over its previous close of 74.38.

Domestic benchmark indices witnessed a sharp decline on Thursday, after a four-day rising streak. The barometer index, the S&P BSE Sensex, dropped 621.31 points or 1.03% at 59,601.84. The Nifty 50 index shed 179.35 points or 1% at 17,745.90. Foreign portfolio investors (FPIs) sold shares worth Rs 1,926.77 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 800.91 crore in the Indian equity market on 6 January, provisional data showed.

Overseas, Asian stocks are trading higher on Friday following heavy losses for some regional markets in the previous trading day, as investors continue to assess the impact of a potentially faster-than-expected policy tightening by the U.S. Federal Reserve. US stocks fell on Thursday to end a day of choppy trading, following the massive tech sell-off in the previous session. The Dow Jones Industrial Average fell 170.64 points, or 0.47%, to 36,236.47, the S&P 500 lost 4.53 points, or 0.10%, to 4,696.05 and the Nasdaq Composite dropped 19.31 points, or 0.13%, to 15,080.87.

Meanwhile, the dollar index, which gauges the greenbacks strength against a basket of six currencies, was trading 0.05 per cent up at 96.22.

Powered by Commodity Insights