Noida, May 26 (APAC Media): The Indian rupee declined by 8 paise to 95.78 against the US dollar in early trading on Wednesday, weighed down by sustained dollar demand, foreign fund outflows, and weak sentiment in domestic equity markets, according to forex traders.
The local currency opened at 95.70 in the interbank foreign exchange market before slipping further to 95.78 against the greenback, compared to its previous close. The movement reflects continued volatility in the currency market, with traders closely tracking global cues and risk sentiment.
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Market participants said the rupee’s weakness was influenced by a stronger US dollar index, ongoing geopolitical uncertainties, and pressure from rising crude oil prices, which tend to widen India’s import bill and strain the current account balance.
At the same time, domestic equities also traded lower in early sessions, adding to risk aversion among foreign institutional investors, who have been net sellers in Indian markets in recent sessions.
Forex dealers noted that persistent foreign fund outflows have increased sensitivity of the rupee to even modest dollar demand, limiting its ability to stage a sustained recovery.
Traders added that any further movement in the currency will depend on global risk trends, crude oil price direction, and potential intervention by the Reserve Bank of India to curb excessive volatility.
Analysts expect the USD/INR pair to remain in a tight but volatile range in the near term, with support and resistance levels being closely watched by market participants.
News Agency Inputs
Disclaimer:Â Views expressed are those of experts and do not reflect APAC Media. This is for informational purposes only, not financial advice. We are not responsible for investment decisions. Please consult a qualified financial advisor before investing.
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