The rupee has seen a record rise against the dollar on Wednesday.
Very good news has come from America for the rupee. The US Central Bank Fed has opened the doors to cut interest rates. Due to which there has been a decline in the dollar index. Besides, a reduction in the prices of crude oil has also been seen. Apart from this, there is a bullish atmosphere in the stock market also. This is the reason why there was a huge rise in the rupee on Wednesday. According to experts, after a long time the rupee has seen an increase of more than 80 paise. Rupee may be seen getting support in the coming days also. Earlier on Tuesday, the rupee had reached a life time low against the dollar. In such a situation, it was expected that the rupee would cross the level of 90 against the dollar. But this did not happen and after the commentary of the Fed Chief, the rupee appeared to be getting tremendous support. Let us also tell you at what level the rupee is being seen in the currency market.
There was a huge rise in the rupee.
The rupee rose 88 paise from its lifetime high to all-time low at 87.93 per dollar in early trade on Wednesday due to weakness in the dollar index after the US Fed hinted at further interest rate cuts in the current year. Foreign currency traders said that the domestic currency was supported by the fall in crude oil prices and news of RBI intervention. In the Interbank Foreign Currency Exchange market, the rupee opened at 88.74 against the US dollar, then gained momentum and reached 87.93, which shows an increase of 88 paise from the previous closing price. Later it was trading at 88.33 against the American currency. On Tuesday, the rupee fell 13 paise to close at an all-time low of 88.81 against the dollar.
Crude oil and dollar index fell
- Meanwhile, the dollar index, which measures the dollar’s strength against six currencies, was trading 0.20 per cent lower at 98.85.
- In the international market, Brent crude oil from Gulf countries was trading at $ 62.12 per barrel with a fall of 0.43 percent, as the shutdown in America continues for the third week and there are no signs of reconciliation from any side.
- On the domestic stock market front, Sensex rose 354.57 points to 82,384.55 in early trade, while Nifty rose 109.55 points to 25,255.05.
- According to NSDL data, on Tuesday, foreign institutional investors sold shares worth Rs 1,508.53 crore in the stock market.
Why did the rupee rise?
Fed Chairman Jerome Powell spoke on Tuesday and hinted at further cuts in interest rates in the current year due to rising unemployment. Anil Kumar Bhansali, treasury head and executive director, Finrex Treasury Advisors LLP, said he also raised concerns over inflation and warned about future risks posed by tariffs and restrictive immigration policies. He said the dollar index fell marginally by about 0.24 per cent to 99.03 compared to the previous session as the market remained on edge over US-China trade tensions and concerns over the continued US shutdown. Both of these have influenced investor sentiment and supported the dollar in the short term, even though global economic uncertainty remains. Bhansali said that the movement of the dollar is being affected due to the non-release of US economic data, which will continue for the third week.