The Indian rupee weakened by 21 paise to 94.71 against the US dollar in early trade on Thursday, reversing some of the gains from the previous session. On Wednesday, the domestic currency had appreciated by 10 paise to close at 94.50 against the greenback.
Rupee Performance in Early Trade
According to forex traders, the rupee opened lower at 94.65 and then slipped further to 94.71, reflecting a decline of 21 paise from its previous close. The movement came amid a strong US dollar in international markets and mixed cues from Asian currencies.
Factors Influencing the Rupee
- Global Dollar Strength: The US dollar index remained elevated, putting pressure on emerging market currencies.
- Domestic Equity Markets: Indian stock indices opened on a cautious note, impacting investor sentiment.
- Crude Oil Prices: A rise in global crude oil prices added to the rupee's woes, as India is a major importer.
Previous Session Recap
In the previous session on Wednesday, the rupee had recovered 10 paise to close at 94.50, supported by a weak US dollar and positive domestic macroeconomic data. However, the gains proved short-lived as the currency resumed its downward trend in early trade on Thursday.
Market Outlook
Analysts expect the rupee to remain under pressure in the near term due to persistent foreign fund outflows and global economic uncertainties. The Reserve Bank of India's intervention in the forex market may provide some support, but overall sentiment remains cautious.
The rupee's movement will be closely watched as traders await further cues from the US Federal Reserve's policy stance and domestic inflation data.
