Rupee eases after 3-day rally amid trade deal hopes; opens at 88.63

Indian Rupee today: The domestic currency opened four paise lower at 88.63 against the greenback on Thursday

The Indian Rupee cooled off after a three-day rally, even as analysts remained hopeful of a further rally on optimism over the first phase of the trade deal with the US. 

 

The domestic currency opened four paise lower at 88.63 against the greenback on Thursday, according to Bloomberg. The Rupee has risen 0.13 per cent this month, while it has fallen 3.55 per cent this year. 

 

After facing pressure in recent weeks, the rupee is gradually regaining strength, quietly asserting its resilience, Amit Pabari, managing director at CR Forex Advisors, said. Hitting a two-week low of 88.42, the momentum is unmistakable, reflecting growing confidence and a sense of stability, he said. 

 

The steady rise hints at a currency finding its rhythm, paving the way for further gains in the days ahead, Pabari said. Positive cues from US-India trade developments, lower crude costs, and gains in domestic equities are gradually strengthening sentiment, he said. 

 

Rupee is facing resistance around 88.80-89.00 and finding initial support near 88.40, according to Pabari. "A sustainable break below 88.40 could open the way toward 88.00-87.70, indicating further rupee strength."

 

The dollar staged a minor rebound, moving above 100.28, after the Federal Reserve minutes showed most officials were against a December rate cut following the October reduction. The measure of the greenback against a basket of six major currencies was up 0.05 per cent at 100.27.

 

Most Asian currencies were slightly weaker, adding some pressure on the rupee, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. With Gift Nifty trading higher, decent inflows are also expected today, he said. The rupee is seen appreciating, given that the announcement of the US-India trade deal is expected soon, he added. 

 

Exporters are expected to hedge positions ahead of the trade deal, while importers may cover near-term needs of about a week before considering longer tenures, Bhansali said. "The rupee is likely to open flat but may move toward 88.40, the first support for the USD/INR pair, which must be broken for a move toward 88 or lower."

 

In commodities, crude oil prices traded with cautious sentiment, with geopolitical tensions and supply concerns. Brent crude price was up 0.27 per cent at 63.68 per barrel, while WTI crude prices were higher by 0.29 per cent at 59.61 per barrel, as of 9:00 AM IST.