Rupee rises after three-day slide on likely FII inflows; ends at 86.59/$

Indian Rupee today: The domestic currency rose 14 paise to end at 86.59 against the dollar, according to Bloomberg

The Indian Rupee ended higher on Friday, breaking a three-day losing streak, with US President Donald Trump taking two weeks to decide on potential action against Iran.

 

The domestic currency rose 14 paise to end at 86.59 against the dollar, after closing at 86.73 on Thursday, according to Bloomberg. The currency has fallen 1.17 per cent so far this month. During the session, most Asian currencies inched up, with the Korean won leading gains.

 

The uncertainty around the Iran-Israel conflict continues, with US President Trump delaying the country’s response to Iran by two weeks, according to analysts. 

 

The White House said Trump still considers negotiations with Iran an option and will decide on supporting Israel within two weeks, leaving investors uncertain. However, Israel said it destroyed nearly half of Iran’s missile launchers, adding that its strikes create the conditions for the downfall of the Iranian government.

 

Brent crude price was down 1.94 per cent at $77.32 per barrel, while WTI crude prices were higher by 1.09 per cent at 75.96, as of 3:35 PM IST. 

 

Meanwhile, potential inflows into equities also supported the currency's movement. Friday promises to be an action-packed day with two major semi-annual index rebalances lined up, the Sensex and the FTSE, Nuvama said in a note, anticipating large foreign inflows. 

 

Foreign portfolio investors (FPIs) have bought equities worth ₹3308.32 crore over the past three days. Most of the selling pressure has been in the mid- and small-cap segments, while broader indices have remained stable despite geopolitical tensions, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "Inflows are expected this week and next, especially with the upcoming HDB Financial Services IPO." 

 

The US dollar index, which measures the greenback against a basket of six major currencies, was down 0.16 per cent at 86.59. The Index remains under pressure, unable to sustain above 100, despite global risk aversion, Bhansali noted.  

 

Rupee traded positively, supported by softer crude oil prices and a weaker dollar index, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. Continued foreign and domestic inflows into Indian markets have helped limit the rupee's downside despite ongoing geopolitical tensions over the past few months, he said. "The rupee is expected to trade in a range of 86.00 to 86.85."