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Indian rupee opens at 22.91 per UAE dirham against US dollar on Tuesday

For two and a half weeks, the currency has been stuck in a narrow 10-paisa range, and the RBI does not want the rupee to fall further

Published: Tue 29 Oct 2024, 10:53 AM

By
Web Desk

The Indian rupee opened flat, slipping by 1 paisa to 84.08 (Dh22.91) against the US dollar in early trading on Tuesday, amid continued foreign fund outflows and a firm dollar in the global market, impacting investor sentiment.

A weak trend in domestic equities and strong dollar added pressure to the rupee. However, lower crude oil prices and potential Reserve Bank of India (RBI) intervention may lend support to the currency at lower levels.

In interbank foreign exchange, the rupee began at 84.08 against the dollar, briefly touching 84.07 in the initial trades.

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The currency for two-and-a-half weeks has been stuck in a narrow 10-paisa range with the RBI not wanting the rupee to fall more.

The central bank has been on offer on the dollar/rupee pair via the public sector all through the trading session in recent days.

The RBI's intervention has negated the effect on the rupee of several factors such as foreigners pulling out a large chunk of money from local equities, U.S. Treasury yields making their way to a three-month high, and the dollar's rally.

"I think people have just given up. You just come in the morning and just know that it will be flat opening and then a 1-2 paisa (intraday) range," a currency trader at a bank said.

"Big risk events are lined up. Whether they are big enough to move the rupee, who knows?"

Trump win bets lift US yields

The yields on the U.S. two-year to 30-year bonds climbed to roughly three-month peaks on Monday. The prospect of Republican candidate Donald Trump winning the U.S. elections has prompted investors to dump U.S. Treasuries and lap up the dollar.

The dollar index is not too far away from its year-to-date high, having rallied 3.5% in October.

Anticipation of this week’s (U.S.) payrolls data and next week’s U.S. election is driving markets, ANZ Bank said in a note.

The U.S. October non-farm payrolls data due this Friday will be observed more keenly than usual considering the Federal Reserve's focus on the labour market.

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