Rupee Opens Flat Under 85 Amid Firm Dollar, Oil Prices

The Indian rupee opened slightly unchanged at 84.85 against the US dollar on Monday morning, maintaining the same position as it closed on Friday. This stable opening reflects steady market conditions.

Dollar and Oil Price Influence

Market analysts expect the dollar-rupee trading pair to fluctuate within a narrow range of 84.90 to 85.10 throughout the day. Brent crude prices have increased by 0.47% to $73.28 per barrel, fueled by diminishing worries regarding a potential US government shutdown. Additionally, a softer reading in the US Personal Consumption Expenditures price index has sparked optimism for potential monetary easing from the Federal Reserve.

Exporters and Importers Strategy

In light of the current market conditions, exporters are advised to hold back and place a stop loss at 84.90. The rupee continues to feel pressure due to ongoing demand for the dollar. Conversely, importers are encouraged to take advantage of any price dips to fulfill their dollar needs effectively.

Experts' Outlook on the Dollar

Amit Pabari, the managing director of CR Forex Advisors, pointed out that the Federal Reserve's recently reinforced hawkish stance, which now indicates only two potential rate cuts in 2025 instead of the previously projected four, has boosted the dollar index. This situation has led to ongoing challenges for emerging market currencies, including the Indian rupee.

Domestic Dynamics and Foreign Investments

On the domestic front, fluctuations in the USD-INR pair exceeded the 85 mark last week, primarily due to the Federal Reserve's cautious outlook affecting investor sentiment, along with significant outflows from foreign portfolio investors. Nevertheless, an upcoming reshuffle in the Sensex, which includes Zomato and is expected to attract net inflows of approximately $260 million, could provide some temporary support for the rupee.

Forex Reserves and RBI Interventions

As a side note, India's foreign exchange reserves have recently dipped to a six-month low. This trend shows that the Reserve Bank of India has been actively intervening to prevent any sharp depreciation of the rupee. Looking ahead, the trading forecast for the dollar-rupee pair appears to remain stable within the previously mentioned range.

Rupee, Dollar, Oil