Rupee Continues Downward Slide Against US Dollar
The Indian rupee started Wednesday on a weak footing. It opened at 90.25 against the US dollar, marking a decline of 0.07% or 2 paise. This movement extended the currency's recent downward momentum.
Recent Trading Patterns Show Consistent Pressure
On Tuesday, the rupee had already slipped 6 paise to close at 90.23. During that session, it even dropped to an intra-day low of 90.30 in the interbank foreign exchange market. This followed a very marginal uptick on Monday, when the currency ended just 1 paisa higher at 90.17.
Multiple Factors Weigh on the Currency
Market experts identified several key pressures on the rupee. Rising crude oil prices and firm metal prices created headwinds. A cautious global environment added to the strain. Ongoing foreign fund outflows, driven by geopolitical tensions and weak equity markets, further pressured the domestic currency.
Anuj Choudhary, a research analyst at Mirae Asset ShareKhan, linked the decline to continuous global risk aversion and geopolitical concerns. He noted that weak domestic markets, continued selling by Foreign Institutional Investors (FIIs), and higher crude prices were all dragging the rupee lower.
Potential Support Factors Emerge
Choudhary also pointed to some factors that could support the rupee at lower levels. Optimism surrounding the India-US trade deal and rising odds of a rate cut, following weak labour market reports last week, might provide a floor. Any intervention by the Reserve Bank of India could also offer support.
Forex analysts observed that market sentiment improved slightly after a recent statement. The new US envoy to India, Sergio Gor, said on Monday that both countries remain actively engaged in finalising a trade deal.
Technical Levels and Global Context
Dilip Parmar, Research Analyst at HDFC Securities, provided technical analysis for the USD-INR pair. He stated that immediate support is placed at 89.90, while resistance is seen at 90.40. "Short-term traders should watch the 89.90 level closely," Parmar advised. "A move below it could trigger a short-term trend reversal."
In global markets, the dollar index, which tracks the greenback against a basket of six major currencies, was up 0.09% at 98.95. Meanwhile, Brent crude futures climbed 1.38% to $64.75 per barrel.
