Due to the widespread rise in the dollar index, the Indian rupee declined on Thursday, May 11, moving closer to the almost two-week lows touched earlier this week.
Strengthening Dollars
On Thursday, the rupee traded at 82.09 to the dollar, down from 81.9850 the previous session. After remaining unchanged in the wake of Wednesday’s U.S. inflation data, the dollar index increased by 0.46% on Thursday.
The majority of Asian currencies also declined during the day. If the USD/INR support at 81.85 persists, an additional upswing, which might not be directional, is probable until the resistance at 82.2 is broken.
Forex Trader’s Opinion
Forex traders said investors were trading carefully as they awaited domestic inflation data on Friday. On the other side, the U.S. dollar gained support when U.S. inflation started to decline, which also encouraged a positive outlook on international markets.
Consumer inflation in April decreased to 4.9%, lower than expected, according to U.S. government statistics.
The local currency will likely stay in the range of 81.85-82.25 during the course of the day as traders wait for the release of U.S. unemployment statistics later in the day, according to Jateen Trivedi, VP Research Analyst at LKP Securities.
According to exchange statistics, Foreign Institutional Investors (FIIs) were net purchasers in the capital market on Wednesday, buying shares worth Rs 1,833.13 crore.
The British pound and the European currency euro have been among the most significant gainers versus the dollar this year.
As per The Economic Times, the markets are awaiting the Bank of England rate decision later in the day and are also keeping an eye on Friday’s inflation data for India.
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