Rupee advances as Fed cuts weigh on dollar; ends higher at 88.11/$

Indian Rupee today: The domestic currency closed 15 paise higher at 88.11 against the greenback on Tuesday

The Indian Rupee closed higher on Tuesday, but failed to hold on to its opening gains as a weak dollar supported the currency. 

 

The domestic currency closed 15 paise higher at 88.11 against the greenback on Tuesday, according to Bloomberg. In opening deals, the currency rose to 87.97. So far this year, the rupee has depreciated 2.92 per cent, making it the worst performer among Asian peers.

 

Rupee traded positively as Federal Reserve rate cut expectations kept the dollar weak, Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities, said. "The tariff-driven weakness in the rupee now appears to be largely priced in unless fresh developments emerge from the US side." 

 

Crude prices remained stable, while ongoing US–India trade talks provided some relief to sentiment, Trivedi said. Going ahead, the rupee is likely to stay within a range of 87.75-88.50, with a decisive break below 87.75 opening room for a rally towards 87.10 levels, while resistance near 88.50 caps the upside, he added. 

 

"The rupee slide is largely against the dollar, not against any other currencies. That's also because of the way globally, the dollar has strengthened," the Finance Minister said in a recent interview when asked if the slide of the rupee against the greenback is a concern. "This is not the case only with rupee versus dollar; it's the case with many other currencies versus the dollar. So we are keeping a good watch on this," she told PTI in an interview.

 

Global funds have been net sellers in stocks in the first six days of September and have sold equities worth ₹1.42 trillion so far this year, according to NSDL data. 

 

The dollar index, a measure of the greenback against a basket of six major currencies, was down 0.18 per cent at 97.27. 

 

Meanwhile, Indian government bonds are trading with a slightly positive bias as fiscal concerns have eased following smaller-than-expected revenue loss from recent tax cuts, and lower US yields are also providing support. 

 

In commodities, crude oil prices were trading higher after Opec+ raised output for October by 1,37,000 barrels, less than expected. Brent crude price was up 0.61 per cent at 66.42 per barrel, while WTI crude prices were higher by 0.67 per cent at 62.68 per barrel, as of 3:42 PM IST.