Rupee trades slightly higher amid weak oil prices; opens at 85.87/$

Indian Rupee today: The domestic currency appreciated 3 paise at open to 85.87 against the greenback, after closing at 85.90 on Wednesday

The Indian rupee traded slightly higher on Thursday, after the currency slumped past the 86 mark in the previous session, weighed by dollar demand from foreign investors. 

 

The domestic currency appreciated 3 paise to open at 85.87 against the greenback, after closing at 85.90 on Wednesday, according to Bloomberg.   The rupee was down 0.3 per cent this year so far, while regional peers such as the Korean won, Thai baht, and Malaysian ringgit have gained from the dollar weakening, according to Reuters. 

 

The rupee has been the worst-performing currency this year, despite a 7.5 per cent GDP growth in the last quarter, taking full-year growth to 6.5 per cent, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. 

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  It fell by 0.3 per cent yesterday amid persistent dollar demand from foreign portfolio investors, oil companies, and importers, touching 86.0325 as the Reserve Bank of India (RBI) continued to intervene by selling dollars to limit the depreciation, he added.

  The rupee is expected to open at 85.79, just 11 paise stronger than the previous close, despite a decline in the dollar index and gains in Asian currencies, Bhansali said. "It is likely to trade in a range of 85.50 to 86.25 during the day, with the market closely watching the RBI’s actions."

 

The dollar index was slightly higher as calls for rate cuts by the Federal Reserve grew after data showed hiring growth fell to the slowest pace in two years. Private-sector payrolls increased by 37,000 last month, according to ADP Research. Additionally, the US Federal Reserve's 'Beige Book' report on the economic conditions noted that "economic activity has declined slightly since the previous report," released on April 23. 

 

The dollar index, which measures the greenback against a basket of six major currencies, was up 0.03 per cent at 98.815.

 

All eyes will be on the RBI's six-member monetary policy committee (MPC), which began its meeting on Wednesday and is expected to cut the repo rate by 25 basis points (bps) to 5.75 per cent. The committee is scheduled to announce its policy review on Friday. 

 

In commodities, crude oil prices fell during the session as Saudi Arabia hinted at another major production increase. Brent crude price was down 0.17 per cent to $64.75 per barrel, while WTI crude prices were 0.32 per cent higher at 62.65, as of 9:10 AM IST. 

 

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