Finance
The Indian rupee ended Thursday lower after three days of advances, despite falling crude oil prices and a drop in the dollar index.
According to Bloomberg statistics, the domestic currency closed 27 paise lower at 85.52 against the greenback, down from 85.28 on Wednesday. The currency has been volatile this month, falling by almost 1.4% so far.
Crude oil prices fell throughout the day on news that the US and Iran are getting closer to an agreement on the country’s nuclear program. As of 3:35 PM, Brent crude prices were down 3.80% to $63.58 per barrel, while WTI crude prices were down 4.04 percent to $60.60.
The dollar index also remained weak as the US reaffirmed that it does not intend to devalue the dollar as part of trade agreements. The dollar index was trading 0.26 percent lower at 100.77. According to Amit Pabari, managing director of CR Forex Advisors, the index is solidly bid and is anticipated to attempt higher resistance levels near 102.50-103.00, with immediate support at 100.00-100.20.
Meanwhile, US President Donald Trump announced Thursday that India has proposed zero tariffs on American goods as part of attempts to reach a new trade agreement with Washington. This sent the stock market higher during a very quiet trading session.
Traders also anticipated a rate drop by the Reserve Bank of India at its upcoming policy meeting following the current inflation statistics. Wholesale price inflation fell to a 13-month low of 0.85 percent in April, but consumer inflation remained below the RBI’s 4 percent target for two months in a row. Economists expect three consecutive reductions in the policy repo rate, beginning with a 25 basis point cut in June.
The Indian trade data is scheduled to be issued today, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. Yesterday’s inflation data indicated lower retail and wholesale inflation as food prices dropped.
Technically, the Dollar-Rupee pair remains in a downtrend, and any rebound is likely to create a selling opportunity, according to Pabari. “For now, the pair is expected to trade within a range of 84.80-85.80 levels.”
Source: BS
