By Admin 
Rupee vs Dollar: There may have been initial enthusiasm in the market after the announcement of the trade deal with America, but now investors and businessmen seem to be more cautious. On Thursday, there was a slight strengthening in the rupee and it rose by seven paise to reach 90.40 per dollar, but this rise remained within a limited range only. The biggest reason for this is that no official and signed document regarding the India-US trade agreement has been made public yet. Experts of the foreign exchange market say that at present the market has come out of “celebration mode” and has come into “verification mode”, that is, instead of just statements, concrete terms and written agreements are awaited.
Market in celebration mode
In the interbank foreign exchange market, the rupee opened at 90.52 per dollar and strengthened slightly to 90.40 during trading. On Wednesday it closed at 90.47. However, this strengthening of the rupee remains under pressure from the continuous demand for dollars from companies and global cues. The dollar index, which reflects the US dollar’s position against six major currencies, rose 0.18 percent to 97.79, putting pressure on currencies of emerging economies.
Talking about the stock market, weakness was seen in the domestic equity markets. In early trade, the Sensex fell by about 279 points to 83,538.97, while the Nifty slipped by 94 points to 25,681.85. According to market experts, investors are currently avoiding taking risks and are waiting for the interest rate signals from the Monetary Policy Committee meeting of the Reserve Bank of India. RBI’s announcement on Friday will make it clear what the future trend of interest rates will be, which will have a direct impact on both the rupee and the stock market.
Fall in crude oil prices
On the international front, the fall in crude oil prices brought some relief to the rupee. Global standard Brent crude fell by almost two percent to $ 68.07 per barrel. However, experts believe that any sharp rise in oil prices could immediately limit the rupee’s strength, as India imports a major part of its requirement.
According to Anuj Chaudhary, Research Analyst, Mirae Asset Sharekhan, weaker than expected services sector PMI data has put pressure on the rupee. He said that due to expectations regarding the India-US trade deal, there was a record rise in the rupee on Tuesday, but due to fluctuations in crude oil prices and global economic signals, this rise could not be sustained further. However, he believes that as the terms of the trade deal become clear and if they remain in India’s favour, it will strengthen domestic market sentiment and the rupee may see a positive trend in the medium term.
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