Rupee opens at 85.49/$; Gains for fourth day on weak dollar, FII inflows

Indian Rupee extended its gaining streak to day four, as strong economic performance and renewed inflows in the domestic equities supported the currency. 

 

The domestic currency opened 19 paise stronger at 85.49 against the greenback, after closing at 85.68 on Wednesday, according to Bloomberg data. The currency has gained nearly ₹1.2 in the last four sessions, capping the monthly decline against the dollar at 0.06 per cent. 

 

This rise in the Rupee has been supported by positive domestic economic data and the global shift in sentiment following the US actions to slow down China’s growth, according to Amit Pabari, managing director at CR Forex Advisors. As a result, India is becoming a more attractive destination for foreign institutional investors, he said.  Foreign institutional investors (FIIs) snapped a nine-day selling streak on April 15, Tuesday, to buy domestic equities worth ₹6,065.78 crore, marking the third-largest single-day buying this year. On Wednesday, FIIs continued buying equities for a second straight day, investing ₹3,936.4 crore. 

 

 

 

Further, India’s real yields continue to remain higher than those of major global economies, making Indian assets more appealing to foreign investors, Pabari said. "This is expected to bring in more foreign money and provide further support to the rupee."

 

The dollar index — a measure of the value of the US dollar relative to a basket of foreign currencies — was up 0.13 per cent to 99.50, the lowest since April 2022. The dollar index will likely see a short-term pullback to the 101.50–102 range, driven by the hawkish statements from the Federal Reserve, Pabari added.   READ STOCK MARKET LIVE UPDATES TODAY HERE

 

The rupee closed a tad stronger at 85.68 on Wednesday and was expected to be at 85.62 and move within a range of 85.40/80, Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP, said. "Markets will keep a close watch on the Reserve Bank of India (RBI), which seems to be buying dollars to curb the rupee's rise." 

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Equity markets in Asia traded positively even as the overnight cues from Wall Street weighed on investors' sentiments. Federal Reserve Chair Jerome Powell dampened hopes of a rate cut, saying that the central bank's focus is on preventing tariff-driven price pressures from fueling sustained inflation. 

 

Crude oil rose for a second day as the US vowed maximum pressure to disrupt Iran's supply chain.  Brent crude oil was up 0.93 per cent to $66.46 per barrel, while WTI crude was up 1.14 per cent at 63.18 per barrel as of 9:10 AM IST. 

 

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