The Indian rupee declined 6 paise to trade at 87.18 against the US dollar in early trading hours on Friday, March 7. The slide came amid subdued global sentiment sparked by uncertainties over international trade and ongoing outflows of foreign capital from domestic equity markets.
However, the rupee avoided a sharp plunge due to a weaker dollar index and persistently low crude oil prices, according to forex traders.
Rupee's Early Morning Movement
In early trade at the interbank foreign exchange market, the rupee opened weaker at 87.13 against the greenback, subsequently dropping to 87.18, reflecting a depreciation of 6 paise compared to its previous close.
Thursday's session had also seen the rupee halting its three-day winning streak, closing 6 paise lower at 87.12. Prior to that, the currency had gained 31 paise over three consecutive sessions.
Dollar Index and Crude Oil Prices
The dollar index, a measure of the US currency’s strength against a basket of six major global currencies, witnessed a minor dip of 0.04%, trading at 103.99, providing some support to the rupee.
Simultaneously, Brent crude oil prices saw a slight uptick of 0.20%, trading at USD 69.60 per barrel in futures markets. Despite the marginal increase, crude prices remain near six-month lows, cushioning the rupee against significant volatility.
Domestic Equity Markets Under Pressure
On the domestic equities front, market indices were in negative territory during early trade. The benchmark BSE Sensex fell 116.64 points, or 0.16%, to 74,223.45, while the broader NSE Nifty dropped 19.30 points, or 0.09%, trading at 22,525.40 points.
Adding pressure, foreign institutional investors (FIIs) continued their selling spree, withdrawing Rs 2,377.32 crore from domestic stocks on a net basis on Thursday, according to exchange data.
Global Factors Influencing Forex Market
Global investors are closely monitoring comments from US Federal Reserve Chairman Jerome Powell and the central bank's forthcoming balance sheet report scheduled later on Friday.
In related trade developments, US President Donald Trump announced a delay in imposing 25% tariffs on most Mexican goods by one month, following discussions with Mexico’s President. This announcement comes shortly after comments by US Commerce Secretary Howard Lutnick, who indicated tariffs on Canada and Mexico would likely be postponed.
The developments around tariffs and global trade policies remain critical factors influencing investor sentiment worldwide, impacting currencies including the rupee.
Last updated by a enewsx: