Rupee closes marginally weaker against the US dollar

• Image Credit: Google

• Jun 20, 2023 | Dhupali Das

The rupee marginally declined against the US dollar, tracking a decrease in the Asian currencies market...

Digital Desk: The rupee marginally declined against the US dollar, tracking a decrease in the Asian currencies market. The domestic currency finished at 82.12 per dollar, down 0.21 percent from its previous close of 81.94. 

"Well, as long as FII and FDI inflows continue to flow, which have so far played an important role in strengthening the rupee, the downward pressure from global fundamentals will be limited. However, the USD/INR pair will be driven by the tug of war between two primary variables, RBI intervention and inflows. "For the time being, there is a slim chance that the pair will break through the 81.80 support zone and a high probability that it will move towards the 82.20–82.30 levels in the coming sessions," CR Forex stated in a recent note.

Also Read : IndiGo to purchase 500 A320 family aircraft from Airbus in record deal

Traders are now eyeing the Bank of England's next base rate decision, which is scheduled for June 22. The current market sentiments suggest a rate hike at the forthcoming meeting, with estimates ranging from 5–6 percent for future hikes among analysts and institutions, a Reuters report said.

US Federal Reserve Chair Jerome Powell is set to provide testimony on June 21 and 22. Traders are pricing in a nearly 75% possibility of a 25 basis point rate hike by the Fed at its July meeting, following a pause in June.

Asian currencies were trading lower as the Bank of China dropped its key one-year and five-year loan prime rates to boost the economy. Taiwan's currency plummeted 0.28 percent, China Offshore sank 0.25 percent, while the Hong Kong dollar and Indonesian rupiah both fell 0.1 percent. The Philippines peso increased by 0.34 percent, the Japanese yen by 0.26 percent, and the Thai baht by 0.12 percent each.

The dollar index, which measures the strength of the US currency against major currencies, was trading at 102.471, down 0.05% from its previous close of 102.52.