Rupee ends a tad higher as dollar slips after US midterms
The rupee closed at 94.64 per dollar, up slightly from its close at 94.74 in the previous session
The Indian rupee saw a slight increase on Wednesday, buoyed by a weaker dollar and declining oil prices as investors evaluated the consequences of the US midterm elections, according to Reuters. The currency closed at 94.64 per dollar, slightly up from the previous day's closing at 94.74. Democrats secured a majority in both the Senate and House, delivering a significant win in areas traditionally dominated by Republicans, following a decisive defeat for President Donald Trump.
The dollar index, tracking the greenback against six key currencies, experienced a 0.4% drop to 101.3, with the euro, British pound, and Swiss franc gaining traction. The rupee also touched a two-week peak early in the trading session before easing as importer and interbank bids in the dollar strengthened around the 94.50 level.
Traders at state-run banks cautioned that selling USD/INR could prove risky due to the limited resilience of dips at these levels. Most analysts surveyed by Reuters predict the rupee will erode its recent gains and decline further in the coming months due to persistent external pressures. Measures taken by the Reserve Bank of India, including heavy intervention, a deposit and borrowing scheme totaling $143 billion, and interest rate hikes, have thus far prevented a disorderly decline but have not tackled the root causes. These efforts have merely staved off disaster and bought precious time, according to Natixis.
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