Daijiworld Media Network - Mumbai
Mumbai, Feb 11: The rupee depreciated 6 paise to 90.62 against the US dollar in early trade on Wednesday, weighed down by geopolitical tensions and renewed dollar demand from importers.
At the interbank foreign exchange market, the rupee opened at 90.56 against the greenback and later slipped to 90.62, marking a loss of 6 paise from its previous close. During initial trade, it also touched a high of 90.46. On Tuesday, the domestic currency had pared early losses to settle 10 paise higher at 90.56 against the US dollar.
Forex traders said markets initially reacted positively to the India-US trade deal, but fresh concerns surfaced after the White House released its fact sheet detailing the agreement.
The document states that India will eliminate or reduce tariffs on all US industrial goods and a broad range of American food and agricultural products. These include dried distillers' grains, red sorghum, tree nuts, fresh and processed fruits, certain pulses, soybean oil, wine and spirits, among others. It also notes India’s commitment to purchase over USD 500 billion worth of US energy, information and communication technology, agricultural, coal and other products.
CR Forex Advisors MD Amit Pabari said the US document goes beyond the February 6 joint statement by explicitly mentioning tariff reductions on additional American agricultural products, including certain pulses, which he described as a politically and economically sensitive area for India.
“In the near term, the 90.00–90.20 zone continues to act as a strong support for the rupee. As long as this area remains intact, USD/INR could gradually move higher, with the 91.00–91.20 range emerging as the next potential upside zone in the coming sessions,” Pabari said.
Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six currencies, was trading 0.14 per cent lower at 96.66. Brent crude, the global oil benchmark, rose 0.78 per cent to USD 69.34 per barrel in futures trade.
Analysts noted that as a major oil-importing nation, higher crude prices increase India’s import bill, which in turn exerts pressure on the rupee, even if the impact is gradual.
On the domestic equity front, the Sensex rose 141.21 points to 84,415.13 in early trade, while the Nifty advanced 51.95 points to 25,987.10. On Tuesday, foreign institutional investors bought equities worth Rs 69.45 crore, according to exchange data.