Rupee ends marginally higher amid outflow pressures; closes at 88.67/$

Indian Rupee today: The domestic currency closed two paise higher at 88.67 against the dollar on Thursday

The Indian Rupee traded slightly higher on Thursday as the currency saw pressure from likely selling by foreign portfolio investors (FPIs) amid US trade and visa tensions. 

 

The domestic currency closed two paise higher at 88.67 against the dollar on Thursday, according to Bloomberg. The currency fell 3.57 per cent so far this year, while it hit an all-time low of 88.79 on Tuesday. Selloff by global funds continued to the third day as they sold ₹2,425.75 crore on Wednesday. 

 

The RBI appears to be allowing a measured weakening of the rupee to support exporters, with market participants building a case for a rate cut in the October 1 meeting, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. 

   

Meanwhile, trade negotiations in the US yielded no positive outcome for India, and the Commerce Minister’s team is expected to return this weekend, analysts said. 

 

The Trump administration on Tuesday said it is proposing to base allocation of the H-1B visa on skill level and wages instead of the current lottery method. This comes after Donald Trump signed an executive order raising the H-1B application fee to $100,000, from the earlier $2,000–5,000.  

The Indian rupee may be affected by concerns over remittance growth, corporate repatriation, foreign equity flows and trade negotiations, Nomura Holdings said, according to a Bloomberg report. Trump’s tightening of H-1B visa norms will further dampen near-term sentiment on the rupee, the note said. 

 

The dollar index rose to a three-week high after the US Federal Reserve Chair Jerome Powell highlighted "two-sided risks" for the economy. The measure of the greenback against a basket of six major currencies was down 0.07 per cent at 97.80.

 

In commodities, crude oil prices fell over concerns of tightening supplies as US crude inventories fell, according to analysts. Brent crude price was down 0.52 per cent at 68.95 per barrel, while WTI crude prices were lower by 0.65 per cent at 64.57 per barrel, as of 3:40 PM IST. 

 

Key cues to watch today include the Bank of Japan's monetary policy meeting minutes, the US’ final second-quarter gross domestic product (GDP) growth rate, second-quarter core personal consumption expenditure prices, and weekly initial jobless claims for the period ended September 20.