Indian Rupee gains for third straight day; Ends 9 paise higher at 85.68/$

The Indian currency extended its gains for the third straight day on Wednesday, as the continued weakness in the dollar index offset the rise in crude oil prices. 

 

The domestic currency strengthened 9 paise to end at 85.68 against the greenback after closing at 85.77 on Tuesday, according to Bloomberg data. In the last three sessions, the currency has depreciated by nearly ₹1.01, capping the monthly fall to 0.25 per cent in April.  

 

The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was down 0.66 per cent to 99.55, the lowest since April 2022. In a fresh retaliatory move, the US raised tariffs on China to 245 per cent, following Beijing's latest countermeasures. Earlier, the Trump administration launched a probe into potential tariffs on critical minerals, while also urging China to begin talks to ease the escalating trade tensions. 

 

The Rupee traded higher on dollar weakness, as the index slipped below the 100$ mark, supporting emerging market currencies, according to Jateen Trivedi, VP research analyst - commodity and currency, LKP Securities. "Additionally, foreign institutional investors(FII) inflows of over ₹6,000 crore into Indian markets have strengthened sentiment, driven by relief on global trade tariffs and India's relatively resilient positioning amidst ongoing global trade tensions."

 

The sharp upward movement in the Rupee was primarily driven by favourable domestic economic data releases, particularly the inflation data, according to Amit Pabari, managing director of CR Forex Advisors. 

 

India’s retail inflation further eased to 3.34 per cent in March from a seven-month low of 3.61 per cent in February, the lowest year-on-year reading since August 2019.  

 

The rupee has quietly appreciated over 1 per cent in the past week, reflecting both external tailwinds from a softening dollar and internal stability from improving capital flows, Trivedi said. "However, with global trade war concerns still looming, volatility cannot be ruled out."

 

Crude oil prices rose after seeing a muted early session as the demand outlook soured on concerns of a trade war. Brent crude oil was up 0.83 per cent to $65.21 per barrel, while WTI crude was up 0.82 per cent at 61.83 per barrel as of 3:40 PM IST.