The Indian rupee ended nearly flat on Wednesday, closing at 90.9475 against the dollar, nearly unchanged from its previous session close of 90.95. According to reports from The Economic Times and Reuters, the currency's stability came despite expectations of elevated dollar demand related to non-deliverable forwards (NDF) maturities this week. State-run banks were intermittently spotted selling dollars above the 90.95 mark, as reported by a trader at a large private lender. The local unit settled at 90.9475 per dollar, marginally different from the previous session's close of 90.95, reflecting a tug-of-war between offshore dollar demand and domestic stabilising forces.
Despite the anticipated dollar demand from NDF maturities, appetite to wager against the rupee has dulled due to expectations that the Reserve Bank of India will intervene to curb sharp falls, as reported by The Economic Times and Reuters. The currency's stability reflects a balance between positive impulses from modest inflows and gains in Asian peers, which were up between 0.2% to 0.5%, with the Chinese yuan rising to a 34-month high on Wednesday. Market participants had anticipated increased dollar demand this week due to NDF maturities, with such offshore contracts often triggering spot market flows that put temporary pressure on emerging market currencies like the rupee. The dollar index remained largely flat at 97.8, offering limited directional cues.
According to Amit Pabari, managing director at FX advisory firm CR Forex, the 90.60-90.80 range continues to act as an important support zone for USD/INR. As reported by The Economic Times and Reuters, Pabari noted that as long as this area remains intact, the overall trend points to a steady climb toward the 91.20-91.50 levels. This technical analysis suggests potential for further rupee weakness in the near term, with traders likely to watch RBI signals and key technical levels closely in the sessions ahead. The flat close underscores the ongoing tug-of-war between offshore dollar demand and domestic stabilising forces.
Indian equity benchmarks also started the day on a strong note, rising nearly 1% before paring gains to end the day modestly higher, as reported by The Economic Times and Reuters. The blue-chip Nifty 50 ended 0.2% higher, reflecting cautious optimism among investors. The initial surge of nearly 1% before trimming gains demonstrated strong market sentiment before profit-taking set in. Global markets are also watching the quarterly earnings of AI chipmaker Nvidia, whose results could influence global risk appetite given its heavy weighting in U.S. equity markets. Analysts reckon the firm's heavy weighting in U.S. equity markets means the results could have a spillover impact on global risk appetite.