The Indian Rupee has experienced continuous volatility this year, hitting record lows against the US Dollar multiple times. In early trading on Thursday, the Rupee fell by 7 paise to reach ₹88.69 per Dollar.
Why the Rupee is Falling
Analysts suggest that the softness in domestic markets and the strengthening US Dollar are affecting investor sentiment. However, ongoing negotiations regarding the US-India trade deal are generating some market positivity, which has provided minor support to the Rupee at lower levels.
According to forex traders, the Rupee opened at ₹88.66 against the Dollar in the interbank foreign exchange market but soon weakened by 7 paise, settling at ₹88.69 per Dollar.
Weakness in the Stock Market
Domestic stock markets also witnessed a bearish trend. The BSE Sensex dropped 205.08 points to 84,261.43 in early trade. The NSE Nifty-50 also slipped 61.15 points, trading at 25,814.65. Brent crude oil prices also fell by 0.13% to $62.63 per barrel.
Foreign Institutional Investors (FIIs) are continuing their sell-off, having sold shares worth ₹1,750.03 crore on Wednesday, creating additional pressure on the Rupee.
The Dollar Index, which shows the US Dollar’s strength against six major currencies, rose by 0.02% to 99.51. This strength of the Dollar is pressuring not only the Rupee but also several other Asian currencies.
What Can Be Expected Next?
Market experts indicate that the direction of the Rupee will largely depend on:
- US Treasury Yields
- Crude Oil Price Movement
- FII Investment Trends
If the outflow of foreign capital continues and the Dollar Index remains strong, the Rupee could come under further pressure. However, positive news related to the trade deal and exports could provide stability.
