The Indian rupee opened weaker on Wednesday, ahead of the US Federal Reserve’s rate decision. The currency weakened by two paise to open at Rs 84.92 against the greenback, according to Bloomberg. It had closed at Rs 84.90 on Tuesday.
“The Indian rupee fell to its lowest yesterday and is expected to remain weak in constant dollar demand due to a rising trade deficit and falling exports, while RBI supports it at certain level but allows it to reach that level. Today the range of 84.75/00 is expected for the rupee, with risk of more weakness,” according to Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP.
Bhansali expects that exporters may continue to wait with a stop loss at 84.70, since the rupee remains in a weakening mode due to dollar demand.
The US Dollar Index stood at 106.9330 and was down 0.02%.
“The dollar is expected to continue its outperformance in the first half of 2025 due to its strong economy and lower rate cuts initially. The dollar may weaken in the second half, based on the fact that market has already priced in most of the economic policy announcements, while the growth implications are not yet factored in,” according to Bhansali.
Brent Crude oil was at $73.20, up 0.01%.
“As traders await for more cues from Fed on interest rate front, Brent oil prices moved little as renewed concerns of demand from China, as well as fears from a supply glut next year,” according to Bhansali.
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