Rupee extends fall even amid weakening dollar; opens lower at 88.33/$

Indian Rupee today: The domestic currency opened 9 paise lower at 88.33 against the greenback on Tuesday

The Indian Rupee extended its fall on Tuesday, even as the dollar index fell with the Federal Reserve’s policy decision in focus. 

 

The domestic currency opened 9 paise lower at 88.33 against the greenback on Tuesday, according to Bloomberg. So far this year, the currency has fallen by 3.18 per cent. 

 

After holding firm below the 88 mark for over a week, the rupee rose past 88 and briefly touched 88.30 before pulling back. The drop marked its sharpest single-day fall in a month, but behind the headline move lies a more balanced story, analysts said. 

 

Monday’s upward swing in the dollar was largely a reflection of short-term corporate outflows and importer demand, especially from oil companies rushing to meet month-end payments, Amit Pabari, managing director at CR Forex Advisors. "This indicates that the rupee’s dip was temporary and flow-driven, rather than a sign of deeper weakness."

 

 

While optimism on renewed trade discussions supported broader sentiment, India faces mixed implications, with potential pressure to recalibrate its trade dynamics with the US, Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities. "This dual impact has kept the rupee volatile within a broad range." 

 

That inflow from foreign portfolio investors (FPIs) in the coming months could bring fresh equity inflows, helping to offset external dollar demand and lend a measure of stability to the rupee, analysts said. 

 

For now, the market seems to be balancing between short-term pressure and medium-term optimism, Pabari said. "The rupee is expected to find strong resistance near 88.40, while support lies around 87.60–87.70. A break below that zone could open the door for a move toward 87.20."

 

The dollar index traded lower ahead of the Donald Trump and Xi Jinping meeting later this week. The measure of the greenback against a basket of six major currencies was down 0.09 per cent at 98.69. The Federal Reserve will gather to decide policy on Oct. 28-29, when markets expect it to lower rates by another quarter point, according to Bloomberg. 

 

In commodities, crude oil prices were slightly higher as investors weighed on impact of US sanctions on Russian producers. Brent crude price was up 0.05 per cent at 65.65 per barrel, while WTI crude prices were higher by 0.03 per cent at 61.32 per barrel, as of 9:09 PM IST.