Rupee roared, dollar stopped, now how will Trump government manage
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In the currency market, the dollar was seen falling in front of the roar of the rupee for the second consecutive trading day. The rupee has seen a rise for the second consecutive day against the rest of the world’s currencies. This rise has made it clear that the roar of the rupee is not going to reduce in any case in the coming days. On the other hand, the dollar index is also seen falling continuously and is not ready to reach the level of 100. According to experts, the way Donald Trump has given concessions on the reciprocal tariff front, now work is being done to prepare for concessions on other tariffs as well. However, the base rate of 10 percent still remains.
If we talk about the figures, then due to the sharp rise in the stock markets and the continued weakness in the US currency amid global uncertainties, the rupee closed with a rise for the second consecutive session at $ 85.77 on Tuesday. Apart from this, the rupee is also seen getting support from the fall in crude oil prices at the global level, favorable domestic inflation data and the latest move by the US administration to suspend additional 26 percent tariffs on India till July 9. Let us also tell you what kind of figures are being seen in the currency market.
Rupee rises for the second consecutive day
In the interbank foreign currency exchange market, the rupee opened at the day’s lowest level of 85.85 and touched an intra-day peak of 85.59 against the dollar. At the end of the session, the rupee closed at 85.77 (provisional against the dollar), showing a gain of 33 paise from the previous close. In Friday’s session, the rupee closed with a sharp gain of 58 paise at 86.10 against the dollar. This means that the rupee has gained 91 paise against the dollar. Foreign exchange markets were closed on Monday on the occasion of Dr. Baba Saheb Ambedkar Jayanti.
These also led to the rise in the rupee
- The latest government data released on Tuesday showed that wholesale price inflation in the country fell to a 6-month low of 2.05 per cent in March, as prices of vegetables, potatoes and other food items declined.
- On the other hand, retail inflation figures have come down to more than 5 years. Meanwhile, the dollar index was trading 0.02 per cent lower at 99.38, the level last seen on March 1, 2022.
- In the international market, Brent crude oil fell 0.11 per cent to its four-year low of $64.81 per barrel. Earlier, crude had reached this level in April 2021.
- In the domestic equity market, the 30-share BSE Sensex jumped 1,577.63 points or 2.10 per cent to close at 76,734.89, while the Nifty rose 500.00 points or 2.19 per cent to 23,328.55.
- According to exchange data, foreign institutional investors (FIIs) sold equities worth Rs 2,519.03 crore on a net basis on Friday.
What do experts say?
Anuj Chaudhary, Research Analyst, Mirae Asset Sharekhan, said the rupee gained due to a weak US dollar index and a surge in domestic markets. Chaudhary further said that overnight fall in crude oil prices and positive macroeconomic data supported the rupee. However, FII outflows prevented sharp gains. He said overall weakness in crude oil prices could also support the rupee at lower levels. However, importers buying dollars and FII outflows could prevent sharp gains. Traders can take cues from the Empire State Manufacturing Index data from the US. The USD-INR spot price is expected to be in the range of Rs 85.40 to Rs 86.
