Forex traders said the rupee sentiment remained fragile amid global uncertainty.
The US shutdown is providing a counter-intuitive lift to the dollar, with government spending halted, fewer dollars are circulating — tightening supply and offering short-term support to the currency, they said.
At the interbank foreign exchange market, the rupee opened at 88.64, and slipped to 88.69 against the greenback, registering a fall of 4 paise from its previous close.
On Friday, the rupee slipped 2 paise to 88.65 against the US dollar.
“The RBI’s defence of the 88.80 level has now become a visible line in the sand, keeping USD/INR capped, with strong resistance seen around 88.80-89.00 and support near 88.40. This indicates a short-term consolidation within this range,” CR Forex Advisors MD – Amit Pabari said. However, backed by India’s solid economic fundamentals and improving investor sentiment, the medium-term bias remains tilted toward rupee strength. A decisive break below 88.40 could pave the way for further gains toward 88.00-87.70 levels, Pabari added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.08 per cent to 99.68.
“The Federal Reserve’s cautious stance and the prolonged US government shutdown have stirred uncertainty, but not enough to trigger a clear directional move,” Pabari noted.
Brent crude, the global oil benchmark, rose 0.66 per cent to USD 64.05 per barrel in futures trading.
On the domestic equity markets front, the Sensex climbed 202.48 points to 83,418.76 in early trade, while the Nifty rose 68.65 points to 25,560.95.
Foreign institutional investors bought equities worth Rs 4,581.34 crore on Friday, according to exchange data.
Meanwhile, India’s forex reserves dropped USD 5.623 billion to USD 689.733 billion for the week ended October 31, the Reserve Bank of India said on Friday.
The overall reserves had declined by USD 6.925 billion to USD 695.355 billion.
