Indian Rupee opens stronger at 85.19/$ on FII inflows, US-China trade talks

Indian Rupee's positive momentum continued on Friday as the currency opened stronger, even as dollar and oil prices remained firm amid foreign inflows into equities.  

 

The domestic currency opened 8 paise stronger at 85.19 after closing at 85.27 against the greenback on Thursday. The continued rise in the local currency in the latter half of the month has helped log a 0.24 per cent appreciation so far. 

 

US President Donald Trump’s softer shift on China briefly cheered global markets, propelling the dollar index to a high of 99.93, according to Amit Pabari, managing director at CR Forex Advisors. China is considering suspending its 125 per cent tariff on some US imports as the costs of the trade war weigh heavily on certain industries, Bloomberg reported quoting sources.  

 

The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.22 per cent at 99.6, as of 9:10 AM IST. "Technically, the dollar index is approaching key levels—support sits at 99.00, while resistance looms at 100," Pabari said. 

 

Meanwhile, foreign portfolio investors continued to buy equities for the seventh consecutive day on Thursday. Global funds bought stocks worth ₹8,250.53, taking the seven-day purchase to ₹29,450.5 crore. 

 

Despite strong domestic fundamentals, the Indian rupee faces near-term pressure from a firm dollar and lingering geopolitical risks, Pabari noted. "The dollar-rupee pair is expected to find support around 85.20 and resistance at 85.60, with a breakout potentially pushing it toward 85.80." 

 

The currency gained yesterday from 86.68 to 86.26 as inflows from FPIs who bought shares worth ₹8,000 crore on Thursday, noted Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. For the day, the range for rupee is expected to be 85.00 to 85.50 with an opening of 85.13, he noted, adding that a close watch on RBI who has been buying dollars near to 85.00 levels is necessary. 

 

Crude oil prices advanced in early trade on Friday amid expectations of increased Opec+ supply and uncertainty over US-China tariff talks. Brent crude oil was up 0.53 per cent to $66.90 per barrel, while WTI crude was up 0.57 per cent at 63.15 per barrel as of 9:20 AM IST.