In a notable shift in the foreign exchange market, the Indian rupee surged by 51 paise, reaching 86.17 against the US dollar during early trading on Friday. This significant rise is attributed to a robust start in domestic equity markets, the weakening of the US dollar, and a drop in oil prices. This uptick follows a recent decision by US President Donald Trump, who deferred the imposition of additional tariffs on India until July 9.
Rupee Strengthens Against the Dollar
Trading on the interbank foreign exchange opened with the rupee at 86.22, marking an increase of 46 paise from the previous close. Earlier this week, the rupee had settled at 86.68 against the dollar. Notably, the markets were closed on Thursday in observance of Shri Mahavir Jayanti.
- Opening exchange rate: 86.22
- Previous close: 86.68
- Markets closed on Thursday for a public holiday.
Expert Insights on Currency Trends
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, shared his insights, stating, “With the dollar index dipping below its September low of 100.20, we anticipate the rupee to surpass 86. Exporters are likely to benefit from this uptick, and any further risk aversion should be leveraged for additional coverage.” He predicts that the rupee will likely fluctuate between 86.00 and 86.60 throughout the day.
- Expected trading range for the rupee: 86.00 – 86.60
- Dollar index status: 100.04, down by 0.81%
Global Market Influences
The dollar index, which measures the dollar’s strength against a group of six currencies, is experiencing a decline. Bhansali noted that the dollar has reached a decades-low against the Swiss Franc, driven by diminishing confidence in the US economy. This has led investors to seek safer assets such as the Swiss Franc, Yen, Euro, and gold.
Decline in Oil Prices and Market Performance
In the commodities market, Brent crude, the global oil benchmark, decreased by 0.27%, trading at USD 63.16 per barrel. Meanwhile, the domestic equity landscape witnessed a substantial rise, with the BSE Sensex climbing by 1,204.02 points (or 1.63%) to reach 75,051.17. The Nifty also saw a significant increase, up by 385.25 points (or 1.72%) to 22,784.40. However, it’s worth noting that foreign institutional investors (FIIs) sold equities worth Rs 4,358.02 crore on a net basis on Wednesday, according to exchange statistics.
- Brent crude price: USD 63.16 per barrel
- BSE Sensex rise: 1,204.02 points
- Nifty increase: 385.25 points
This combination of factors paints a dynamic picture of the current financial landscape, indicating potential opportunities for traders and investors alike as the rupee shows resilience in the face of global economic pressures.
