Overview
- The rupee closed at 95.23 on Wednesday, a 67-paise drop that marked its third consecutive session of losses and a breach of the 95.00 psychological level.
- Traders and analysts attributed the decline to a firmer dollar, short covering and persistent capital outflows, with exchange data showing foreign institutional investors sold equities worth Rs 2,556.75 crore.
- The dollar index strengthened to about 101.42 on the day, putting pressure on Asian currencies and amplifying moves in the USD/INR pair.
- Domestic markets showed a split signal as equity indices rose while HSBC’s India Manufacturing PMI eased to 54.2 in June, indicating slower but still-positive factory activity.
- Early trade on Thursday saw a partial rebound to around 94.90 as crude oil prices fell and fresh foreign inflows to Indian bond markets supported the currency, while analysts cited near-term technical resistance near 95.80 and support near 94.60.