Market Update: Rupee Strengthens, Await US Inflation Data

Market Update: Rupee Strengthens, Await US Inflation Data

The rupee strengthened against the US dollar by 8 paise to 82.99 in early trade on Monday. This appreciation occurred amidst the weakening of the American currency in the global market.

Interbank Exchange Opening:

At the interbank foreign exchange, the domestic currency commenced trading at 83.01 and later touched 82.99 against the US dollar in initial transactions, marking an increase of 8 paise compared to its previous closing rate.

Previous Closing Rate:

On the preceding Friday, the rupee concluded trading at 83.07 against the US dollar.

Awaiting US Inflation Data:

Investors are eagerly anticipating the release of US inflation data on Tuesday, which is expected to provide further direction for market movements.

Expert Opinion:

Amit Pabari, Managing Director of CR Forex Advisors, mentioned that if the US inflation data falls below expectations, it may lead to a correction in the dollar index towards 102.50 levels, thereby strengthening the rupee. Conversely, a stronger-than-expected release might push the dollar index towards 105 levels, although the USDINR pair is not anticipated to exceed 83.25 levels on the upside.

Dollar Index Movement:

The dollar index, which measures the dollar’s performance against a basket of six major currencies, was trading marginally lower at 104.03, reflecting a slight weakness in the dollar.

Brent Crude Futures:

Brent crude futures, the global oil benchmark, saw a decrease of 0.51 percent, reaching USD 81.77 per barrel.

Domestic Equity Market:

In the domestic equity market, the 30-share BSE Sensex experienced a decline of 140.34 points or 0.20 percent, settling at 71,454.25. Similarly, the broader NSE Nifty dropped by 39.35 points or 0.18 percent, closing at 21,743.15.

Foreign Institutional Investors (FIIs) Activity:

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday, purchasing shares worth Rs 141.95 crore, according to exchange data.

India’s Forex Reserves:

India’s forex reserves surged by USD 5.736 billion to USD 622.469 billion for the week ended February 2, as reported by the Reserve Bank. This marked a significant increase from the previous week’s reserves of USD 616.733 billion, which had seen a rise of USD 591 million.

Multiple-Choice Questions (MCQs):

  1. What was the initial value of the rupee against the US dollar in early Monday trading?
    • A) 83.07
    • B) 83.01
    • C) 82.99
    • D) 82.91
    Answer: C) 82.99
  2. What event are investors eagerly awaiting for further market cues?
    • A) US GDP release
    • B) US inflation data
    • C) European Central Bank meeting
    • D) OPEC oil production report
    Answer: B) US inflation data
  3. Who provided an expert opinion on the potential impact of the US inflation data on currency markets?
    • A) CR Forex Advisors MD Amit Pabari
    • B) US Federal Reserve Chair
    • C) European Central Bank President
    • D) Indian Finance Minister
    Answer: A) CR Forex Advisors MD Amit Pabari
  4. What was the percentage change in the dollar index reported in the update?
    • A) 0.07%
    • B) 0.51%
    • C) 1.0%
    • D) -0.07%
    Answer: A) 0.07%
  5. How much did India’s forex reserves increase by for the week ended February 2?
    • A) USD 591 million
    • B) USD 5.736 billion
    • C) USD 622.469 billion
    • D) USD 616.733 billion
    Answer: B) USD 5.736 billion