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The value of the Indian rupee decreased by 6 paise to reach 83.58 against the US dollar in early trading on Friday. This drop was influenced by a downward trend in the Indian stock market and high crude oil prices. Forex traders mentioned that the strong performance of the US dollar in international markets also affected investor confidence.
The rupee started at 83.58 against the dollar at the interbank foreign exchange, dropping by 6 paise from the previous day. However, it recovered from these initial losses and even reached a high of 83.46 against the US dollar in early trading on Friday.
On Thursday, the rupee made a recovery from its lowest point and ended the day 9 paise higher at 83.52 against the US dollar. Meanwhile, the dollar index, which measures the strength of the dollar against other major currencies, slightly increased to 106.17.
In the oil market, Brent crude futures, the international benchmark, went up by 2.46% to reach $89.25 per barrel.
Anil Kumar Bhansali, the Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, mentioned that Brent Oil prices surged to $90.48 per barrel after Iran issued a warning about its nuclear weapons stance in response to potential attacks on its nuclear facilities by Israel.
Global tensions led to a slight decline in Asian currencies, with the Indonesian Rupiah falling to 16281 and the South Korean Won dropping to 1390. The Chinese Yuan also dipped to 7.2569. The Japanese Yen, on the other hand, strengthened to 153.68 due to increased risk aversion.
Analyst Bhansali predicts that the rupee will remain weak amidst current risk-off sentiments.
In the domestic market, the BSE Sensex was trading 0.68% lower at 71,999.22 points, down by 489.77 points. The NSE Nifty also saw a decline of 144.35 points, or 0.66%, reaching 21,851.50 points.
Foreign Institutional Investors (FIIs) were net sellers on Thursday, having sold shares worth Rs 4,260.33 crore in the capital markets, as reported by exchange data.