The Indian rupee opened little changed against the US dollar on Thursday as crude oil prices steadied along with a flat dollar index.
The rupee opened flat at 83.98 against the US dollar, according to Bloomberg data. The domestic currency had closed at 83.97 against the greenback on Wednesday.
Oil prices steadied near their lowest close since June 2023 after an industry report indicated a significant drawdown in US crude stockpiles. Crude prices have been under pressure due to ongoing concerns about the economic outlook in major consumer countries and expectations of abundant supply.
Brent oil traded at around $72.84 or 0.19% up as of 09:32 a.m. Traders were also keeping an eye on Libyan production, as a conflict between rival eastern and western governments poses a threat to supply, according to Bloomberg.
The rupee's decline has largely been driven by global risk aversion, exacerbated by weaker business activity in the US, and an increased demand for the US dollar from importers. Yet, a glimmer of relief arrived in the form of falling crude oil prices towards 72.20 levels, according to Amit Pabari, managing director, CR Forex Advisors.
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"With key US economic data on the horizon, traders and policymakers will remain on edge, anticipating further moves. For now, the rupee is expected to trade within a narrow range of 83.80 to 84.05, with a slightly broader band of 83.70 to 84.05 in the medium term," he said.
Indian rupee continues to remain weak despite Asian currencies rising as inflows get absorbed by RBI, while oil companies, FPIs and importers continue to buy dollar from market, keeping the currency on the lower side, said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.
Exporters may wait and watch for further weakness with stop loss at 83.75 for hedging, while importers can buy dips with a stop at 84.02, Bhansali said.
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