Rupee Strengthens Against Dollar in Early Trade
The rupee gained 18 paise to reach 86.26 against the US dollar during early trading hours on Friday, buoyed by positive domestic equities and a weaker dollar index. At the interbank foreign exchange, the rupee opened at 86.31 and touched 86.26, marking an improvement from its previous close of 86.44.
Key Drivers of Rupee’s Appreciation
Forex traders highlighted several factors supporting the rupee’s performance:
- Soft Dollar Index: The dollar index fell 0.15% to 107.88, boosting emerging market currencies like the rupee.
- Weak Crude Oil Prices: Brent crude dropped 0.22% to $78.12 per barrel, reducing import costs for India.
- Positive Domestic Equities: Optimism in the domestic stock market added strength to the local currency.
The rupee gained 18 paise to reach 86.26 : Union Budget in Focus
Market participants are closely watching the upcoming Union Budget, which is expected to play a pivotal role in shaping market sentiment and influencing the rupee’s trajectory.
The rupee gained 18 paise to reach 86.26 : Expert Insights
According to Amit Pabari, MD of CR Forex Advisors, “The USD/INR pair is expected to trade within the range of 86.20–86.80. A break below 86.20 could pave the way for further downside toward 85.80–86.00 levels.” He also mentioned that upcoming inflows, such as IREDA’s $570 million fundraising activities, could provide additional support to the rupee.
Recent Performance of the Rupee
On Thursday, the rupee depreciated by 9 paise to settle at 86.44. However, it has shown resilience in the past two trading sessions, appreciating due to the weakening dollar and other favorable conditions.
The rupee’s rise is supported by favorable domestic market conditions and weak crude oil prices. Forex inflows from IREDA’s $570 million fundraising and optimism around the Union Budget are likely to provide additional strength. Dollar index weakness also benefits the rupee.
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