The domestic currency opened stronger at 81.97 versus a dollar, and hit an intraday high at 81.83, before closing at 81.85 – up 23 paise from its previous close.
“The dollar looks vulnerable despite the good US non-farm payroll data as the market factors in rate cuts in 2024 due to the expectation of a recession,” said Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors.
“The rupee took cues from the positive EM and DM currencies which gained nearly 0.50 per cent after a softened US CPI report, which hurt the DXY (dollar index). Backing the gains were robust FII flows into equities, bringing in over Rs 7,300 crore, so far, in merely six sessions of April as risk-on sentiment takes over,” said Amit Pabari, managing director, CR Forex.
“…the latest prints of a widening trade deficit to nearly $20 billion, coupled with surging crude and gold prices, and the RBI’s intervention on the buy-side are likely to limit the gains around 81.80 to 81.50 levels, if any,” Pabari said.
India’s merchandise trade deficit in March 2023 stood at $19.73 billion, which was higher than the $17.43 billion recorded in the previous month, according to government data released on Thursday.
“The Indian trade deficit, which was higher than last month, came at $19.73 billion against $18.53 billion a year ago. However, combining the service data, the deficit was at just $ 6.03 billion. The data looks encouraging and can narrow the current account deficit of the country,” Bhansali added.