Indian rupee falls for 6th straight session: What's the reason?
What's the story
The Indian rupee has witnessed its sixth consecutive session of decline, closing at ₹86.41 against the US dollar today. The fall is attributed to a strong American currency and foreign fund outflows. However, forex traders have noted that lower crude oil prices and heavy buying in domestic equity markets provided some cushion to the domestic currency.
Market fluctuations
Rupee closes at ₹86.41 per dollar
The Indian rupee opened weak at ₹86.46 and hit an intra-day high of ₹86.34 against the greenback in the interbank foreign exchange market. It ended the session at ₹86.41, a loss of 3p from its previous closing level. The dollar index, which measures the strength of the greenback against a basket of six currencies, rose by 0.04% to 97.16 amid higher inflation in the US, and lowered hopes for an interest rate cut by Federal Reserve policymakers.
Price influences
Brent crude falls to $68.23 per barrel
Brent crude, the global oil benchmark, fell by 0.52% to $68.23 per barrel in futures trade. Investors are now watching the outcome of India-US trade talks ahead of an August 1 deadline, as Indian exporters could face higher tariffs in the US market. If these discussions fail or get delayed, it could add further pressure on the rupee's performance against other currencies.
Market trends
FIIs clocked heavy selling
In the domestic equity market, Sensex rose by 539.83 points or 0.66% to 82,726.64, while Nifty gained 159 points or 0.63% to 25,219.90. However, foreign institutional investors (FIIs) offloaded equities of around ₹3,548.92 crore on a net basis yesterday, according to exchange data.