The Indian rupee continued to hover near its all-time low, trading flat at 84.07 against the US dollar in early trade on Friday, 25 October 2024. The local currency remained under pressure due to a firm American dollar and ongoing foreign fund outflows.
In the interbank foreign exchange market, the rupee opened at 84.07, maintaining its previous day's closing level. On Thursday, it had also ended flat at 84.07 against the dollar.
Forex traders pointed out that a modest recovery in domestic equity markets helped prevent further depreciation of the rupee. However, analysts noted that foreign investors continue to offload Indian assets in favour of higher returns from the Chinese market, contributing to the rupee's inability to recover since it hit its lowest level of 84.10 on 11 October.
Rising US Treasury yields have also raised concerns about a potential delay in interest rate cuts by the Federal Reserve, further supporting the strength of the dollar. Additionally, geopolitical uncertainties surrounding the upcoming US presidential election have steered investors toward safe-haven assets, adding to the rupee's woes.
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.03 per cent at 103.95, indicating continued strength in the US currency.
In the energy markets, Brent crude futures edged higher by 0.24 per cent, reaching USD 74.56 per barrel, adding to inflationary pressures and affecting emerging market currencies like the rupee.
On the domestic equity front, the Sensex gained 44.38 points (0.06 per cent) to 80,109.54, while the Nifty rose by 27.35 points (0.11 per cent) to 24,426.75, providing some support to the market sentiment. However, both indices closed lower in the previous session, marking their fourth consecutive day of losses.
Despite some positive signals from equity markets, the rupee's path to recovery remains uncertain amid global financial volatility and continued foreign fund outflows.
