Rupee Opens Stronger Against US Dollar

The Indian rupee opened stronger on Monday, appreciating by 27 paise to 85.11 against the US dollar, compared to its previous close of 85.38 on Thursday.

This marks a continuation of the rupee's recovery, which saw a sharp appreciation of 31 paise at market close on Thursday, driven by growing foreign inflows, a largely unchanged dollar index, and settling market sentiment.

Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, commented on the rupee's performance, stating, the Indian rupee is expected to open higher as the dollar index fell to its lowest in three years, while all assets rose against the dollar. "The rupee is expected to trade in a range of 85 to 85.60 as markets look to RBI for buying the dollar after exporters remained unhedged. A break of 85.00 will take it to 84.75 levels."

On Thursday, the rupee had opened at 85.61 and closed at 85.38 against the US dollar, extending its slip below the psychological level of 86 for the third session. "Range for the day is 85.00-85.60. Exporters may wait to sell. Importers may now wait for 85.00 levels to further hedge," Bhansali noted.

The broader market sentiment was influenced by a series of factors, including anxiety over tariffs and criticism of the US Federal Reserve Chairman by President Donald Trump, which led to a slump in the dollar and a rise in gold prices. Asian equities and US stock futures slid on Monday morning, with S&P futures down 0.64% and Nikkei down 1.01%. However, China saw a slight uptick of 0.33%, while the Hang Seng remained closed.

Bhansali also highlighted the impact of geopolitical tensions. "Markets were already on edge due to rising geopolitical tensions as Russia and Ukraine violated the Easter Ceasefire while in the Middle East, fighting continued. Trump's tariffs have roiled financial markets and triggered a violent sell-off in interest Treasuries and the dollar index, which has fallen to 98.59."