Rupee falls 2 paise to all-time low of 84.13 against U.S. dollar in early trade

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| Photo Credit: The Hindu

In early trade on Tuesday (November 5, 2024), the rupee fell 2 paise to an all-time low of 84.13 against the U.S. dollar, as persistent foreign fund outflows and a muted trend in domestic equities dented investor sentiments.

Forex traders said all eyes are on the U.S. as it decides its next President. Markets are bracing for potential volatility over the coming days, especially with the Federal Reserve’s monetary policy announcement also scheduled this week.

At the interbank foreign exchange, the rupee opened at 84.13 against the greenback, registering a fall of 2 paise over its previous close.

On Monday (November 4, 2024), the rupee fell 4 paise to settle at a record low level of 84.11 against the U.S. dollar.

The rupee closed at an all-time low on Monday (November 4, 2024) and opened at a new low of 84.13 as U.S. elections rattled stock markets amid persistent foreign fund outflows, said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

“The Reserve Bank of India (RBI) was present to absorb the fall but has been allowing small bouts of depreciation taking the rupee to new lows against the dollar,” Mr. Bhansali added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03% higher at 103.91.

Brent crude, the global oil benchmark, rose 0.19% to $75.22 per barrel in futures trade.

Forex traders said the rupee is likely to trade in a narrow range during the day as the strong dollar weighs on the local unit and rising crude oil prices dragged down the local unit, while any intervention by the RBI may also support the local currency at lower levels.

On the domestic equity market front, Sensex declined 184.51 points, or 0.23%, to 78,597.73 points. The Nifty fell 50.85 points, or 0.21%, to 23,944.50 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Monday (November 4, 2024), as they offloaded shares worth ₹4,329.79 crore, according to exchange data.

Meanwhile, India’s manufacturing sector growth recovered from September’s eight-month low to 57.5 in October fuelled by faster increases in total new orders and international sales, a monthly survey said on Monday (November 4, 2024).