The rupee appreciated by 12 paise to 82.08 against the US dollar in early trade on Friday, mostly because of foreign fund outflows. The rupee closed on Thursday at 82.20 against the US dollar, down 40 paise over its previous close due to foreign fund outflows and corporate dollar demand.
The rupee opened against the dollar at 81.81 on Thursday and touched an intra-day high of 81.71 on the interbank foreign exchange market, a PTI report said. The domestic currency has been under pressure and has crossed 82 per dollar levels in the past two sessions, even after seeing gains after a positive budget on Wednesday. Foreign institutional investors are negatively impacted by the rupee, whereas the weakness of the dollar to multimonth low works well for the domestic currency, according to a report by Reuters.
Finance Minister Nirmala Sitharaman presented the Union Budget for 2023 -- 24 on Wednesday, and the rupee appreciated 8 paise to close at 81.80 against the dollar.
Earlier today, Rahul Kalantri, Vice-President Commodities, Mehta Equities Ltd, said that the USD-INR 24 February futures contract settled positively in a highly volatile session. The daily technical chart shows that the pair is trading above its trend-line support level of 81.65. MACD is showing positive divergence on the daily technical chart and RSI is above 50 levels. According to the daily technical chart, the pair is trading above its trend-line support level of 81.50. RSI is above 50 levels in the technical set-up and the pair has formed a bullish engulfing pattern on the daily technical charts. The pair has strength and crossed 81.85 levels on a daily closing basis. We expect it to meet its resistance level of 82.55 -- 82.70 levels, and support is placed at 82.10 -- 81.85 levels. The Indian rupee is expected to be under less pressure than in 2022, as a global economic slowdown will mean a weaker dollar and lower commodity prices, which would lead to lower imports, according to Chief Economic Advisor V Anantha Nageswaran.
The domestic currency fell 10.14 per cent in 2022, its biggest loss since 2013. The US Federal Reserve's aggressive rate hikes battered emerging market currencies and boosted the dollar, which made the rupee the second worst performing Asian currency.
In 2023, fears in western economies are expected to lead to a dovish stance from the Fed, helping other currencies to stabilise against the dollar.
In the last month, the International Monetary Fund said global growth in 2024 would accelerate slightly to 3.1 per cent, as the full impact of steeper central bank interest rate hikes slows demand globally.