Rupee Advances Against Dollar on Fed Policy Bets, Oil Price Decline
The Indian rupee appreciated by 8 paise against the US dollar on Thursday, buoyed by broad-based weakness in the greenback and growing market expectations of interest rate cuts by the US Federal Reserve. A decline in crude oil prices further supported the local currency, although foreign institutional investor (FII) outflows from the equity market limited gains.
The rupee opened stronger at 85.43 per dollar, compared to the previous close of 85.51, before marginally weakening to 85.46 during the session.
The US dollar index, which tracks the currency’s performance against a basket of six major peers, fell 0.07% to 99.02, reflecting a broader risk-on sentiment in global markets.
“The US-China trade deal and easing inflation in the US have created a bullish sentiment in emerging markets. This, along with strong demand at the latest US Treasury auction, is undermining the dollar’s strength,” said Amit Pabari, Managing Director of CR Forex Advisors.
Brent crude prices fell 0.39% to $69.50 per barrel in futures trading, easing inflationary pressures and lending further support to the rupee.
Investors are also eyeing India’s Consumer Price Index (CPI) data, set to be released later today, which could influence short-term currency movement.
“The dollar index is under continued pressure, hovering near its lowest levels since 2022,” noted Jigar Trivedi, Senior Research Analyst at Reliance Securities.
India’s equity markets opened in positive territory but reversed gains as the session progressed. The Sensex dropped 135.78 points to 82,379.36, and the Nifty slipped 35.40 points to 25,104.35.
Rupee Technical Outlook
Analysts anticipate the USDINR pair may see resistance near 85.80–86.00 and immediate support at 85.40–85.50. A breach in either direction could trigger a move of up to 50 paise.
“Crude oil volatility and global sentiment will guide the rupee’s path in the near term,” Pabari added.
