Rupee Slips 6 Paise To 93.77 Against Dollar, Strong Greenback Tightens Grip Despite Falling Crude Prices

Mumbai: The Indian rupee slipped 6 paise against the US dollar on Thursday, November 12, amid a stronger American currency and higher US Treasury yields, which put pressure on emerging market currencies. The domestic currency fell from roughly 93.73 to 93.77 per dollar in the interbank foreign exchange market. Earlier, the rupee had risen by 6 paise to settle at 93.71 on Wednesday.

The rupee hit a seven-month high of 93.69 against the US dollar on Wednesday, driven by inflows from foreign portfolio investors and lower crude oil prices. The US dollar gained momentum following stronger-than-expected American inflation and employment data, which supported Treasury yields. The dollar index, representing the greenback's performance against six major currencies, rose 0.12% to 103.03.

While lower international crude oil prices offered some relief to the Indian currency, the rupee's decline is primarily attributed to the strengthening dollar. The inflation concerns in the United States have heightened expectations of a possible interest rate hike by the Federal Reserve in December.

Forex experts believe that favorable foreign capital inflows and softer crude prices could support the domestic currency. According to Amit Pabari, Managing Director at CR Forex Advisors, the USD/INR pair could move towards 93.50 and then 93.00 if the current conditions persist. However, a further strengthening of the US dollar could push the exchange rate towards the 94.10–94.30 resistance zone.

Positive domestic equity markets and foreign institutional investments helped mitigate the rupee's losses. The Sensex increased by 166.44 points to 82,013.58, while the Nifty rose by 55.65 points to 25,316.55 during early trading. Investors will continue to watch global inflation trends, Federal Reserve policy expectations, crude oil movements, and foreign investment flows to anticipate further changes in the rupee-dollar exchange rate.