Rupee's Sharp Decline Against the Dollar

The Indian rupee experienced a significant drop, closing at 87.66 against the US dollar, a decrease of 48 paise. This decline was attributed to ongoing foreign institutional investor (FII) outflows, global trade tensions, and increased dollar demand from oil importers.

Market Reactions and Analyst Insights

Forex traders pointed to renewed fears over global trade disruptions following US tariff measures and demand from oil marketing companies as key factors. Anuj Choudhary of Mirae Asset Sharekhan noted, "We expect the rupee to remain weak amid uncertainty over the India-US trade deal and FII outflows."

Looking Ahead

Attention now turns to upcoming US factory order data and the Reserve Bank of India’s monetary policy decision. The Monetary Policy Committee's meeting outcome, set to be announced on Wednesday, is highly anticipated.

Global Oil and Currency Markets

Brent crude futures fell to $68.93 per barrel amid OPEC+ production increases and softening US demand. Meanwhile, the US dollar index saw a slight decline, reflecting broader market uncertainties.

Equity Markets Defy Currency Weakness

Despite the rupee's fall, Indian equities rallied, with the BSE Sensex and Nifty both posting gains. However, FIIs remained net sellers, withdrawing significant funds from the market.