Rupee Closes Stronger Against Dollar After Touching Record Low
During the day, the domestic currency depreciated three paise to hit an all-time low of Rs 83.575 against the greenback.
The Indian rupee closed stronger on Friday after hitting a fresh record low earlier in the day amid a strong US dollar index and spike in crude oil prices due to the escalating West Asia conflict. The local currency strengthened seven paise to close at 83.47 against the U.S. dollar. During the day, it depreciated three paise to hit an all-time low of Rs 83.575 against the greenback. It had closed at Rs 83.54 on Thursday, according to Bloomberg data.
Ongoing geopolitical tensions limit rupee gains as the dollar could find support in case the situation worsens, according to Jateen Trivedi, research analyst at LKP Securities, said.
"Risk-off sentiment remains prevalent, with assets like gold, yen, Swiss Franc, Brent oil and the USD gaining traction due to safe-haven demand," said Amit Pabari, managing director at CR Forex Advisors.
Asian markets experienced another downturn as globally, investors turned cautious with a general hesitance to taking risks ahead of the weekend. Ongoing tensions in West Asia curbed any potential gains.
"Risk-off sentiments will keep the rupee on the weaker side," Anil Bhansali, executive director at Finrex Treasury Advisors, said.
US initial jobless claims and housing data endorse belief in a strong labour market and hot inflationary trends. Geopolitical risks again take centre stage, creating a risk-off scenario. Brent crude prices and the dollar index are higher, while global equities are lower, according to Kunal Sodhani, vice president of Shinhan Bank.
Despite the rupee's fundamentals taking a backseat, global economic challenges are at the forefront, according to Pabari.