The Indian rupee traded within a narrow range and ended the day, as of August 12, 2 paise lower at INR 83.97 against the US dollar, with market participants cautious ahead of upcoming domestic economic data.
Forex traders noted that the Indian rupee fell due to a stronger US dollar and rising crude oil prices.
In the interbank forex market, the rupee opened at INR 83.95, hit a low of INR 83.98, and ended at INR 83.97, down 2 paise from the previous close. The rupee had previously dropped to an all-time low of INR 84.09 on August 5 and had gained 2 paise to settle at 83.95 on Friday.
Anuj Choudhary from Sharekhan expects the rupee to weaken slightly due to a strong US dollar, rising global crude oil prices, foreign investor selling, and Middle East geopolitical tensions.
Forex traders note that the INR 84.00 level is a psychological resistance for the USD/INR pair, with market participants also waiting for the Indian CPI inflation and IIP data set to be released later in the day.
Investors are very likely to be cautious this week due to the upcoming US CPI, retail sales, and consumer confidence data. Choudhary expects the USD-INR spot price to trade between Rs 83.75 and Rs 84.25.
The dollar index, which measures the greenback’s strength against six currencies, rose 0.05% to 103.18.
Additionally, India’s forex reserves increased by USD 7.533 billion to a record high of USD 674.919 billion for the week ending August 2, according to RBI.
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