Rupee extends gains even as FPI selloff continues; opens at 88.62/$

Indian Rupee today: The domestic currency opened seven paise higher at 88.62 against the dollar on Thursday

The Indian Rupee extended its advance to its second day as pressure on the currency eased from US trade and visa tensions earlier this week. 

 

The domestic currency opened seven paise higher at 88.62 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 dollar-rupee pair stayed near recent highs on Wednesday after the Reserve Bank of India (RBI) held its stance, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. Continued weakness in the rupee cannot be ruled out as foreign portfolio investors sold equities and bought dollars, he 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 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, Bhansali said. "For the day, exporters are advised to sell near 88.80 (cash/near term) and avoid hedging, while importers should look to buy on dips towards 88.60." 

 

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 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 0.01 per cent at 97.77.

 

In commodities, crude oil prices fell over concerns of tightening supplies as US crude inventories fell, according to analysts. Brent crude price was down 0.26 per cent at 69.13 per barrel, while WTI crude prices were lower by 0.38 per cent at 64.74 per barrel, as of 9:00 AM 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.