The Indian rupee exhibited strength against the U.S. dollar on Thursday, as the impact of lower crude oil prices counterbalanced the influence of a dollar index. Closing at Rs 83.12 against the U.S. dollar, the local currency saw a gain of 2 paise compared to Wednesday’s closing rate of 83.14, according to Bloomberg data.
Amit Pabari, Managing Director at CR Forex Advisors, attributed the bearish sentiment surrounding the rupee to potential equity outflows triggered by a significant selloff in Indian benchmark indices on Wednesday. This market turbulence, stemming from HDFC Bank’s Q3 results and resulting in substantial losses in the banking sector, contributed to the rupee’s challenges.
Kunal Sodhani, Vice President of Shinhan Bank, noted that further support for the dollar’s uptrend came from readings on U.S. retail sales for December, maintaining downward pressure on expectations for a Fed interest rate cut in March. Despite the dollar index later easing off from its peak at 103.70, Sodhani suggested that Rs 83.00 would serve as a support level, while Rs 83.25 would act as resistance for the dollar/rupee exchange rate.