50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Rupee ends nearly flat as cenbank absorbs importers' dollar demand

Published 09/05/2024, 12:03 AM
Updated 09/05/2024, 06:21 AM
© Reuters. FILE PHOTO: A currency trader is pictured through the symbol for the Indian Rupee on the floor of a trading firm in Mumbai May 31, 2013. REUTERS/Vivek Prakash/File Photo
USD/INR
-

By Nimesh Vora

MUMBAI (Reuters) - The Indian rupee ended at its record closing low on Thursday, but was little changed versus the previous session, as the central bank's intervention helped negate the incessant dollar demand from importers.

The rupee ended at 83.9825 to the U.S. dollar compared to 83.9650 in the previous session. Intraday volatility was muted, similar to the activity in recent sessions, with the local currency trading in a 2 paisa range.

The Reserve Bank of India yet again sold dollars to support the rupee, which prevented it from slipping past the crucial 84 level.

"The RBI was at it through most of today's session. There is obviously just no way of knowing when the RBI will decide that it has had enough of defending 84," a currency trader at a bank said.

The rupee needed the central bank's help even on a day when the dollar was weak across the board.

Weak U.S. job opening data pushed the odds of a 50-basis-point Federal Reserve rate cut this month higher to 45%, prompting traders to dump the dollar.

"The rupee today completely disregarded the dollar's decline, like it has been doing for a number of weeks now," Kunal Kurani, associate vice president at Mecklai Financial said.

"Now let's see whether Friday's (U.S.) job report will change things."

© Reuters. An attendant at a fuel station arranges Indian rupee notes in Kolkata, India, August 16, 2018. REUTERS/Rupak De Chowdhuri/File Photo

August's U.S. non-farm payrolls data is being considered the most important jobs report in a long time in the wake of comments by Federal Reserve Chair Jerome Powell that further weakening in the labour market will not be welcome.

Friday's report will decide whether the Fed will cut rates by 25 bps or 50 bps at the Sept 17-18 meeting. Right now, the futures market indicates that it is a toss-up.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.