Rupee Slips to 95.91 as Fed Rate Hike Looms
The Indian rupee dropped 3 paise to 95.91 against the US dollar in early Wednesday trade. This move follows a 113-paise decline over the previous five sessions. The currency faces pressure from a strengthening dollar and net foreign fund outflows.
The Indian rupee opened at 95.89 against the US dollar and fell to 95.91 during early Wednesday trading. This represents a 3-paise decline from the previous close of 95.88. The currency has weakened by 113 paise over the last five sessions. The previous closing level of 94.43 was recorded on September 4.
Foreign institutional investors sold a net amount of 2,977.86 crore rupees in equities on Tuesday. This outflow adds to the downward pressure on the local currency. Positive domestic equity markets provided some support. The Sensex index rose 240.75 points to 74,244.57. The Nifty index gained 83.70 points to 23,202.30 in morning trade.
Fed decision drives dollar strength
The dollar index stood at 99.38, up 0.04 percent. Market participants expect the US Federal Reserve to raise interest rates on Wednesday. This would be the first rate hike in three years. The move aims to control inflation driven by high oil prices. According to GN auto markets and forex reports, this expectation supports the US dollar globally.
Oil prices stay high
Brent crude futures traded at 108.12 US dollars per barrel. The benchmark fell 0.58 percent but remained elevated. Tensions in West Asia continue to disrupt global oil markets. Attacks by Houthi rebels in Yemen target Saudi shipping and infrastructure. Traders fear these actions could block Saudi oil exports from the Red Sea.
Equity markets show resilience
Indian equity indices remained positive despite the currency weakness. The Sensex climbed 0.33 percent in the morning session. The Nifty index increased by 0.36 percent. These gains provided a floor for the rupee. However, the broader macroeconomic environment remains challenging for the local currency.
