In early trade on August 23, 2024, the Indian rupee appreciated by 5 paise, reaching a value of 83.88 against the US dollar. This modest gain comes amid a cautious sentiment prevailing in the forex market. The rupee’s performance was influenced by various factors, including fluctuations in global crude oil prices, foreign fund inflows, and the overall strength of the US dollar in international markets.
Source:- news 18
Forex traders noted that the rupee’s rise was largely driven by a weakening of the US dollar index, which measures the greenback’s strength against a basket of six major currencies. A decline in the dollar index often boosts emerging market currencies like the rupee. Additionally, sustained foreign investments in Indian equities provided some support to the domestic currency.
Source:- BBC news
However, the gains were capped by concerns over rising crude oil prices, which tend to increase India’s import bill and widen the trade deficit, putting pressure on the rupee. Crude oil prices have remained volatile, adding to the uncertainty in the market.
Market participants are closely monitoring global economic data, particularly from the US, for cues on future movements. Any strong economic indicators from the US could bolster the dollar and reverse the rupee’s gains. Additionally, the upcoming Jackson Hole Symposium, where US Federal Reserve officials are expected to provide insights on the future trajectory of interest rates, could impact currency movements.
Overall, while the rupee saw a slight appreciation in early trade, it remains under pressure due to external factors such as crude oil prices and global economic developments. Traders are likely to remain cautious, awaiting further data to gauge the future direction of the rupee against the dollar.
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