The Indian rupee strengthened by 11 paise to 83.29 against the US dollar

In the early hours of Friday 1 December, 2023, trading session, the Indian rupee showcased resilience, appreciating by 11 paise to reach 83.29 against the US dollar. This upward trend was fueled by robust domestic economic indicators and positive momentum in the equity market, further supported by a decline in crude oil prices.

Concurrently, the dollar index, measuring the greenback's strength against a basket of six currencies, experienced a slight dip, trading 0.09% lower at 103.41.

Thursday, 30 November 2023, witnessed the rupee settle 7 paise lower, reaching a record closing low of 83.40 against the dollar. However, India's gross domestic product (GDP) growth during July–September 2023 surged to an impressive 7.6%, surpassing estimates and retaining the nation's position as the world's fastest-growing major economy. The Reserve Bank of India's projection of 6.5% was outpaced, adding further optimism to the economic landscape.

Simultaneously, data revealed that the output of eight key infrastructure sectors saw a substantial jump of 12.1% in October 2023, in stark contrast to the 0.7% expansion recorded in 2022.

Market analysts anticipate a continued appreciation of the rupee, attributing it to expectations of a correction in the dollar and US Treasury yields. Factors such as moderate US consumer spending in October 2023, the smallest annual increase in inflation in over 2.5 years, and a rise in jobless claims indicating a slowing labor market contribute to this outlook. The data raises speculation that the Federal Reserve might soon initiate rate cuts.

On the domestic front, the benchmark index Nifty 50 reached a record high on Friday, 1 December 2023, buoyed by strong buying activities in the metals, banks, and auto sectors. The BSE Sensex exhibited a 0.68% surge, trading 454.54 points higher at 67,442.98, while the NSE Nifty rose by 0.62%, gaining 124.60 points to reach 20,257.75.

On 30 November 2023, which was Thursday, provisional data highlighted Foreign Institutional Investors (FIIs) net buying Indian shares worth ₹8,147.85 crore, while Domestic Institutional Investors (DIIs) net selling shares amounting to ₹780.32 crore.

As the trading day progresses, market participants are closely monitoring these developments, anticipating further impacts on currency, equity, and commodity markets.