Despite geopolitical worries, the rupee trades modestly higher versus the US dollar

 Despite geopolitical worries, the rupee trades modestly higher versus the US dollar

Despite a steep increase in crude oil prices, the Indian rupee edged marginally higher versus the US dollar on hopes that the Reserve Bank of India (RBI) will stop the local currency from falling below its record low. In comparison to Friday's finish of 83.25, the local currency started the day 3 paise higher at 83.22. 

The dollar index, which measures how strong the dollar is relative to a basket of six other currencies, increased 0.26% to 106.32. Forex dealers said that as Middle Eastern tensions increased, the safe-haven dollar gained momentum.

However, the American dollar's rise in the foreign market and a downturn in local stocks caused the rupee to trade range-bound.

On Friday, the rupee's value versus the US dollar finished unchanged at 83.25. In October 2022, the rupee fell to an all-time low of 83.29.

The benchmark for world oil, Brent crude futures, increased 3.13% to $87.23 a barrel.

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According to MD-Amit Pabari of CR Forex Advisors, market sentiment deteriorated as a result of fighting between Israeli troops and Hamas over the weekend, which also happened to coincide with a surprise strike by terrorists on Israel, making it the bloodiest day of bloodshed in the area in fifty years.

Global unrest boosts the safe-haven dollar, while the RBI's vigilance causes a tug-of-war on the currency markets, according to Pabari.

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The 83.30 level is presenting significant resistance for the USD/INR pair, while 82.80 is acting as support. A breach of either crucial level may lead to a considerable movement, with an anticipated range of around one rupee in each direction, he added, creating a situation comparable to a tug-of-war.

The 30-share BSE Sensex fell 274.33 points, or 0.42 percent, to 65,721.30 on the domestic equities market. To 19,569.40, the NSE Nifty lost 84.10 points, or 0.43 percent.

According to exchange statistics, Foreign Institutional Investors (FIIs) sold shares worth 90.29 crore on Friday, making them net sellers in the capital market.

The Reserve Bank said on Friday that India's foreign exchange reserves fell by $3.794 billion to $586.908 billion for the week ending September 29.

According to preliminary data made available on the exchanges, foreign institutional investors (FIIs) net sold Indian shares totaling 90.29 crore on Friday, while institutional investors in India (DIIs) net bought shares worth 783.25 crore.