The rupee depreciated 0.16% to close at 83.9225 per US dollar, versus its previous close of 83.79/$1, LSEG data showed.
The rupee is said to have appreciated yesterday due to a big chunk of dollar inflows. Strong dollar demand by local banks in order to book profits, along with outflows in equites, have caused the rupee to depreciate, traders said.
“The gain that the rupee saw yesterday was because of a huge inflow of dollars. As the rupee appreciated, today we saw a demand for dollars as banks tried to book their profits, and the currency is back to around 83.90 levels, which is normal”, said a foreign exchange trader in a public sector bank.
The market is focusing on minutes of the Federal Reserves’ July meeting, and a revision in the US payroll (employment) data, both due today. If the payroll data is revised sharply on the lower side, expectations of a steeper rate cut by the Fed will be priced in, market participants said.As of now, the odds of a 25 basis point cut by the Fed in September are at 73.5% and the odds of a 50 basis point cut are at 26.5%, according to the CME FedWatch Tool.
