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Indian Rupee Stable as Traders Await Economic Data, Dollar Fluctuates


Apr 24, 2024 #Business, #world

The Indian rupee remained largely unchanged on Tuesday, tracking the subdued performance of its Asian counterparts and stable US bond yields, as market participants await fresh insights from upcoming economic data releases later in the week.

At around 9am UAE time, the South Asian currency stood at 83.3275 against the US dollar (equivalent to 22.705 against the UAE dirham), slightly higher than its previous close of 83.3625 (22.714). Most Asian currencies maintained stability, with the dollar index also showing minimal movement at 106.1.

Traders anticipate the rupee to maintain a range between 83.25 and 83.40, with a slight inclination towards appreciation. Monday witnessed modest gains for the currency, supported by inflows of dollars. Early trading on Tuesday saw foreign banks offering dollars, providing some support to the Indian rupee, according to a foreign exchange trader at a private bank.

However, the rupee’s potential gains may be tempered by dollar demand from importers and mild outflows of dollars following the oversubscription of Vodafone Idea’s follow-on public offering by 6.36 times the shares on offer, as per stock exchange data from Monday.

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Despite these factors, foreign investors have remained net sellers of Indian equities and debt in April, withdrawing a total of $1.04 billion, according to stock depository data.

Amit Pabari, Managing Director at FX advisory firm CR Forex, anticipates limited downside risk for the rupee, with a gradual increase expected in the short term.

Meanwhile, Brent crude oil futures edged slightly higher to $87.39 per barrel, rebounding from a dip on Monday amid reduced concerns over the Iran-Israel conflict escalation. US Treasury yields remained relatively stable ahead of key economic data releases.

As focus shifts towards the Federal Reserve’s policy stance, market attention will center on US GDP data scheduled for Thursday and personal consumption expenditure inflation data due on Friday, serving as crucial indicators for future policy decisions.

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