The rupee traded flat against the US dollar at 84.68 on Wednesday morning as foreign inflows offset the impact of a strengthening greenback.
A strengthening dollar against overseas currencies and a rise in Brent crude in international markets capped further gains in the local unit, while a positive trend in domestic equity markets prevented a drop in the currency.
Forex traders said the rupee has been on a downtrend largely on the back of Donald Trump’s rhetoric on BRICS currency, political instability in the Eurozone, weaker domestic macroeconomic indicators and unabated foreign portfolio outflows.
At the interbank currency exchange, the local unit opened at 84.66, 2 paise higher than Tuesday’s close but lost the gains immediately after to trade flat at 84.68 against the greenback.
The rupee had recovered from its all-time low level and settled with gains of 4 paise at 84.68 against the US dollar on Tuesday.
“The rupee opened stable at 84.68 after the Reserve Bank of India (RBI) ensured it remains within the level of 84.76 as FPIs turned buyers of shares on Tuesday. The range is expected to be 84.60-80 with a close watch on RBI,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.13 percent at 106.50.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.13 percent at 106.50.
The article originally appeared on Business Standard.
