Rupee falls 15 paise to 85.34 against US dollar in early trade

Rupee depreciated 15 paise to 85.34 against the US dollar in early trade on Wednesday (April 23), after the American currency recovered supported by Donald Trump’s softened stance — particularly towards the Federal Reserve and against China.

Forex traders said the market found support after Trump on Tuesday (April 22) backed off from threats to fire FED Chair Jerome Powell after days of intensifying criticism against him for not cutting rates. Trump also signalled the possibility of lower tariffs against China.

The dollar index rose to 99.28, while the US 10-year bond yield was slightly lower at 4.34%. All three US indices gained by more than 2.5% in consequence of Trump’s softened stance.

At the interbank foreign exchange, the domestic unit opened at 85.24 then fell to 85.34 against the greenback in early deals, registering a loss of 15 paise over its previous closing level.

On Tuesday, the rupee settled lower by 4 paise at 85.19 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading higher by 0.37% at 99.28.

The dollar index rose after Trump said that he had no intention of firing Powell but would like to see him more active in terms of his ideas to lower interests,” Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Brent crude, the global oil benchmark, rose 0.83% to $68 per barrel in futures trade, extending the prior day’s gains as investors weighed a fresh round of sanctions against Iran and a drop in US crude stocks while a softer tone from US president Donald Trump on the Federal Reserve helped markets recover.

”With the dollar rebound and domestic demand, the USDINR pair is expected to trade in a range between 85.00-85.40 levels,” CR Forex Advisors MD – Amit Pabari said.

Foreign institutional investors (FIIs) bought equities worth Rs 1,290.43 crore on a net basis on Tuesday (April 23), according to exchange data.