The Rupee has increased against the dollar by Rs. 0.18 after four consecutive days of decline (to be exact). Now currently at Rs. 83.90, this 18 paise increase in value can be described as a much-needed boost from the Market to all of us!

What Tipped the Balance?

We have seen the downward trend of the Rupee over the previous few days ending with it closing below the Rs. 84 mark due to nervousness in the Market regarding the US data release and therefore, the strength of the US dollar. In addition, outside pressures on the Indian stock market caused a decline in the level of foreign investment. The news today was most welcome! Weakening US job numbers decreased the strength of the dollar while an increase in foreign investment flowed into Indian stocks providing the Rupee with some fuel and thus helping it achieve this level (of Rs. 83.90).

Why is this Important?

Those of you that need to purchase imported goods such as electronics, fuel, etc., will benefit from this increase in value as the increase in value of the Rupee will allow you to buy more with the same amount of money when purchasing internationally. Exporters are going to feel the pinch somewhat due to the difficulty of competing with a stronger currency, but for the average Indian planning a holiday or watching inflation, it's a positive thing. It is also an indication that the underlying fundamentals of the Indian economy are still intact, albeit with some external manipulation taking place; we have a strong possibility of further US interest rate cuts and continued growth in the Indian economy.