Rupee rises 1 paisa to close at 84.10 against U.S. dollar

Rupee recovers slightly against U.S. dollar amid election uncertainty, FII outflows, and volatile global markets.

The rupee recovered from its all-time low level to settle 1 paisa higher at 84.10 (provisional) against the U.S. dollar on Tuesday (November 5, 2024), supported by a recovery in the domestic markets and suspected intervention by the Reserve Bank of India.

Forex traders said investors were cautious ahead of the U.S. presidential election. 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 U.S. dollar. During the session, the local currency oscillated between a high of 84.10 and a low of 84.13. It finally settled at 84.10 (provisional), 1 paisa higher from its previous close.

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

“Indian rupee touched fresh record lows amid uncertainty over U.S. elections and FII outflows. Elevated crude oil prices also weighed on the rupee. However, weak U.S. Dollar and positive domestic markets prevented a sharp fall in the rupee,” said Anuj Choudhary – research analyst at Sharekhan by BNP Paribas.

Mr. Choudhary further said the rupee is likely to trade with a negative bias on FII outflows and overall strength in the U.S. Dollar. Elevated crude oil prices may also mount pressure on the rupee. However, a recovery in the domestic markets and any intervention by the RBI supported the rupee at lower levels.

“We could see some volatility ahead of the U.S. Presidential election results. Traders may take cues from trade balance and ISM services PMI from the U.S. and FOMC meeting outcome later this week. USD/INR spot price is expected to trade in a range of 83.95 to 84.30,” Mr. Choudhary added.