The Indian rupee continued its upward trend, gaining 26 paise to end the day at 86.55 against the US dollar on Tuesday. This marks the third consecutive session of appreciation, driven by a robust performance in domestic equity markets and a weakening greenback. Forex analysts noted that disappointing economic indicators from the US contributed to the dollar’s decline, while the strength of various Asian currencies also bolstered the rupee’s position.

Volatile Trading Sessions

During trading, the rupee displayed significant volatility, opening at 86.71 before reaching an intraday high of 86.54 and a low of 86.78. Despite these fluctuations, it closed at 86.55, reflecting a cumulative gain of 67 paise over the past three sessions. On the previous trading day, the rupee had also appreciated by 24 paise to settle at 86.81.

• Key Trading Figures:
  • Opening: 86.71
  • Intraday High: 86.54
  • Intraday Low: 86.78
  • Previous Close: 86.81

Market Influences and Future Outlook

According to Anuj Choudhary, a Research Analyst at Mirae Asset Sharekhan, the rupee is expected to maintain a positive outlook amid favorable global market conditions and a weaker dollar. However, rising crude oil prices and foreign institutional investor (FII) outflows may limit substantial gains. Choudhary also indicated that traders should monitor upcoming US data on industrial production and the housing sector.

• Expected Trading Range: 86.3 to 86.80

The dollar index, which measures the dollar’s strength against six major currencies, was down by 0.04 percent, trading at 103.32. Meanwhile, Brent crude oil prices increased by 1.31 percent, reaching $72 per barrel in futures trading.

Macroeconomic Insights

On the domestic front, India’s trade deficit has fallen to its lowest level in over three years, but concerns remain as exports have sharply contracted. Bhansali, another market expert, highlighted that imports also saw a significant decline, primarily due to reduced oil and gold imports.

Moreover, potential trade pressures loom as US President Donald Trump plans to introduce broad tariffs and sector-specific trade restrictions, which could further impact the rupee’s stability.

Equity Market Performance

The domestic equity landscape witnessed a substantial boost, with the 30-share BSE Sensex climbing 1,131.31 points (1.53 percent) to close at 75,301.26. The Nifty also saw gains, advancing by 325.55 points (1.45 percent) to finish at 22,834.30. However, FII data indicated net outflows totaling ₹4,488.45 crore on Monday, signaling caution among foreign investors.

As the market navigates these dynamics, participants are advised to remain vigilant and informed about both domestic and international developments that may influence currency trading.