By Admin 
Rupee vs Dollar: The Indian rupee on Wednesday could not maintain its recent strength and fell 16 paise to 90.43 against the US dollar, ahead of the start of the three-day meeting of the Monetary Policy Committee of the RBI. A day ago, after the news of agreement on India-US trade agreement, there was a huge rise in the rupee and it strengthened by about 117 paise in early trade. However, this rally did not prove to be sustainable and the very next day caution seemed to dominate the market.
Why the decline despite the deal?
According to foreign exchange traders, a positive environment has definitely been created regarding the India-US trade deal, but investors and businessmen are still exercising caution. The biggest reason for this is that no signed or official document of this agreement has come to light yet. Neither its complete framework draft has been made public nor have the final terms been confirmed. Due to this uncertainty, there was pressure on the rupee. The rupee opened at 90.35 at the interbank foreign exchange market, but later slipped weakly to 90.54 per dollar, registering a decline of 22 paise over its previous close.
It is noteworthy that after the agreement on India-US trade agreement on Tuesday, the rupee had registered a record gain of 117 paise or 1.28 percent against the US dollar and closed at 90.32. During this period, Rupee had emerged as the best performing currency among Asian currencies. But as soon as the market realized that the formal and legal aspects of the deal were still pending, the rupee lost momentum due to profit-booking and caution.
Positive trend in stock market
On the other hand, the dollar did not show much strength on the global front. The dollar index, which reflects the dollar’s position against six major currencies, declined marginally by 0.02 percent to 97.41. There was a rise in the prices of crude oil in the international market and Brent crude rose by 0.65 percent to reach $ 67.77 per barrel.
However, positive trends remained in the domestic stock markets. In early trade, Sensex rose by 68.49 points to reach 83,816.96 points, while Nifty rose by 51.90 points and was seen trading at the level of 25,779.45. According to stock market data, the confidence of foreign institutional investors also remains intact. FIIs were net buyers on Tuesday and bought shares worth about Rs 5,236.28 crore, which supported the market.
Also read: Impact of trade deal, India’s economy will run at a gallop; Goldman made this estimate regarding GDP