The rupee pared its initial gains and settled for the day lower by 7 paise at 85.40 against the US dollar on Friday, amid heightened geopolitical tensions and a negative trend in the domestic markets.
Forex traders said escalated geopolitical tensions, following a terror attack in Pahalgam, Jammu & Kashmir weighed on market sentiment.
Moreover, a muted trend in domestic equities and positive US dollar index dented investors’ sentiment further.
At the interbank foreign exchange, the domestic unit opened at 85.17 and moved between the intra-day high of 85.08 and the low of 85.65 against the greenback. The unit ended the session at 85.40 (provisional), registering a fall of 7 paise over its previous closing level.
On Thursday, the rupee gained 12 paise to close at 85.33 against the US dollar.
“We expect the rupee to trade with a negative bias amid heightened geopolitical tensions and weak tone in the domestic markets. However, persistent FII inflows, overall weakness in the US dollar may prevent a sharp fall in the rupee. USD-INR spot price is expected to trade in a range of 85 to 85.90,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.
On Tuesday, at least 26 persons — mostly tourists — were killed by terrorists at the Baisaran meadows in Pahalgam in one of the worst terror attacks in Kashmir
The local unit dropped about 0.1% week-on-week.
The rupee’s “inability” to rise above its key psychological level of 85 and month-end dollar payments “exacerbated” its downward move, a trader with a private bank said.
Indian stock markets dropped on Friday, significantly underperforming other Asian equity indexes on growing fears of further tensions with neighbouring Pakistan.
The nuclear-armed nations have unleashed a raft of measures against each other, with India keeping a critical river water-sharing treaty in abeyance and Pakistan closing its airspace to Indian airlines, among other steps.
There have been calls for and fears that India could conduct a military strike in Pakistani territory as it did in 2019.
“Geopolitical worries triggered a depreciation of the Indian rupee after Thursday’s gains. A sell-off in domestic equities further dampened sentiment. The local rupee experienced volatility throughout the week amidst these geopolitical concerns and dollar demand from hedgers. Looking ahead, spot USDINR finds support at its 200-day moving average (DMA) of 84.97 and faces resistance at 85.70,” said Dilip Parmar – Senior Research Analyst, HDFC Securities.
The rupee pared its initial gains and settled for the day lower by 7 paise at 85.40 against the US dollar on Friday, amid heightened geopolitical tensions and a negative trend in the domestic markets.
Forex traders said escalated geopolitical tensions, following a terror attack in Pahalgam, Jammu & Kashmir weighed on market sentiment.
Moreover, a muted trend in domestic equities and positive US dollar index dented investors’ sentiment further.
At the interbank foreign exchange, the domestic unit opened at 85.17 and moved between the intra-day high of 85.08 and the low of 85.65 against the greenback. The unit ended the session at 85.40 (provisional), registering a fall of 7 paise over its previous closing level.
On Thursday, the rupee gained 12 paise to close at 85.33 against the US dollar.
“We expect the rupee to trade with a negative bias amid heightened geopolitical tensions and weak tone in the domestic markets. However, persistent FII inflows, overall weakness in the US dollar may prevent a sharp fall in the rupee. USD-INR spot price is expected to trade in a range of 85 to 85.90,” said Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan.
On Tuesday, at least 26 persons — mostly tourists — were killed by terrorists at the Baisaran meadows in Pahalgam in one of the worst terror attacks in Kashmir
The local unit dropped about 0.1% week-on-week.
The rupee’s “inability” to rise above its key psychological level of 85 and month-end dollar payments “exacerbated” its downward move, a trader with a private bank said.
Indian stock markets dropped on Friday, significantly underperforming other Asian equity indexes on growing fears of further tensions with neighbouring Pakistan.
The nuclear-armed nations have unleashed a raft of measures against each other, with India keeping a critical river water-sharing treaty in abeyance and Pakistan closing its airspace to Indian airlines, among other steps.
There have been calls for and fears that India could conduct a military strike in Pakistani territory as it did in 2019.
“Geopolitical worries triggered a depreciation of the Indian rupee after Thursday’s gains. A sell-off in domestic equities further dampened sentiment. The local rupee experienced volatility throughout the week amidst these geopolitical concerns and dollar demand from hedgers. Looking ahead, spot USDINR finds support at its 200-day moving average (DMA) of 84.97 and faces resistance at 85.70,” said Dilip Parmar – Senior Research Analyst, HDFC Securities.
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