Rupee Experiences High Volatility Against US Dollar in Morning Trade

The Indian rupee experienced significant fluctuations during the morning trade on Wednesday, with a mix of support from positive domestic equities and pressure from global uncertainties causing caution among investors.

Forex traders noted that the overall uncertainty surrounding the global economy continues to impact both currencies and commodities, which leaves investors feeling anxious.

At the interbank foreign exchange, the rupee opened at 86.56 but quickly fell to a low of 86.71 against the US dollar in what was a notably volatile session.

In the previous trading session on Tuesday, the rupee decreased by 13 paise to close at 86.58 against the dollar.

Currently, the dollar index, which measures the strength of the greenback against a basket of six currencies, is trading at 108.13, showing a slight increase of 0.07 percent.

Moreover, Brent crude, the international oil benchmark, has seen a minor increase of 0.09 percent to reach USD 79.36 per barrel.

On the domestic front, Indian markets are feeling the weight of global uncertainties. Foreign institutional investors (FIIs) have sold more than USD 7 billion worth of shares this month, putting further pressure on the rupee and the Indian markets, according to CR Forex Advisors Managing Director Amit Pabari.

However, Pabari also mentioned a potential positive outlook, indicating that improved budget allocations and a decline in crude oil prices could provide necessary support to the rupee. He cautioned, though, that with the Union Budget approaching, market volatility is likely to continue as traders proceed with caution.

In terms of future projections, the USD/INR pair is expected to trade between 86.20 and 86.80, reflecting the ongoing global uncertainties.

On the equity market front, the benchmark 30-share Sensex opened positively, trading 224.31 points or 0.30 percent higher at 76,062.67. The wide-based Nifty also saw an increase of 37.70 points or 0.16 percent, rising to 23,062.35.

Additionally, FIIs remained net sellers in the capital markets on Tuesday, offloading shares worth approximately Rs 5,920.28 crore as per exchange data.

Rupee, Dollar, Volatility