The Indian rupee is expected to remain muted against the dollar when trading opens on Thursday, October 7, 2021 after suffering its biggest one-day decline in six months in the previous session amid a massive sell-off of national actions. Additionally, caution ahead of the Reserve Bank of Indias (RBI) Monetary Policy Committee (MPC) decision after its three-day meeting ending Friday could keep the currency range limited. Nonetheless, the dollar out of its overnight highs could limit large losses in the local unit.
The rupee lost 54 paise against the US dollar on Wednesday to end at 74.98. In the interbank forex market, the local currency opened at 74.63 and saw an intraday high of 74.54 and a low of 74.99 against the US dollar in day trading. Local unit eventually settled at 74.98 per dollar, down 54 paise from its previous close. It was also the lowest close for the rupee since April 23 of this year.
Domestic equity barometers ended Wednesday with significant losses, recording gains in the past two sessions. The barometer index, the S&P BSE Sensex, plunged 555.15 points or 0.93% to 59,189.73. The Nifty 50 index fell 176.30 points or 0.99% to 17,646. Foreign portfolio investors (REITs) sold stocks worth Rs 802.81 crore, while domestic institutional investors (DII) were net sellers to the tune of Rs 998.69 crore on the Indian stock market on October 6, according to provisional data.
Overseas, Asian stocks are trading higher on Thursday, with Hong Kong stocks leading the gains. Mainland Chinese markets remain closed for the holidays on Thursday. Wall Street finished higher on Wednesday as investors grew more optimistic Democrats and Republicans in Congress could reach a deal to avoid a default on government debt.
Meanwhile, the US dollar continues to hold near a 14-month high against the euro amid inflation concerns amid soaring energy prices and nervousness about the l Fed action. As of this writing, the US currency was stable at 1.1553 per euro after strengthening to 1.1529 on Wednesday for the first time since July of last year. The dollar index, which measures the greenback against a basket of six rivals, broke from its overnight highs of 94.45 to currently sit at 94.24. The index hit a one-year high at 94.504 last week.
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