July 15th 2024.
The Indian rupee had a rough day in the foreign exchange market as it depreciated by 11 paise against the US dollar, settling at an all-time low of 83.62 on Monday. This was due to the overall strength of the American currency in the global market, as observed by forex traders. However, the rupee was supported by positive trends in domestic equities, with benchmark indices reaching all-time high levels and significant foreign fund inflows.
Starting at 83.53, the rupee lost ground throughout the day and ended up at 83.62 against the dollar, 11 paise lower than its previous closing rate of 83.51. Anuj Choudhary, a research analyst at Sharekhan by BNP Paribas, attributed this decline to the increase in domestic inflation and the positive performance of the US dollar. He also noted the impact of the political violence in the US and the likelihood of a rate cut by the Federal Reserve in September, which could limit the dollar's gains.
Choudhary further added that traders would be keeping an eye on the Empire State manufacturing index data from the US, as the USD-INR spot price is expected to trade within the range of Rs 83.30 to Rs 83.80. Meanwhile, the dollar index, which measures the dollar's strength against six major currencies, was slightly lower at 104.07. On the other hand, Brent crude futures, the global oil benchmark, were trading 0.09 per cent higher at USD 85.11 per barrel.
In the domestic equity market, both the 30-share BSE Sensex and the NSE Nifty reached all-time high levels. The BSE Sensex ended the day 145.52 points higher at 80,664.86 points, while the NSE Nifty settled 84.55 points higher at a record 24,586.70 points. However, according to official data released on Monday, wholesale inflation in the country has been on the rise for the fourth consecutive month, reaching 3.36 per cent in June. This increase is mainly due to the rise in prices of food items, especially vegetables and manufactured goods.
The government data released on Friday also showed a rise in retail inflation, reaching a four-month high of 5.08 per cent in June. This was primarily driven by the increase in prices of food items, including vegetables. On the bright side, Foreign Institutional Investors were net buyers in the capital markets on Friday, purchasing shares worth Rs 4,021.60 crore, according to exchange data.
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