Rupee Opens Stronger By 6 Paise Against US Dollar

The rupee opened stronger against the greenback as global sentiment improved. The Indian unit opened 6 paise stronger at 85.58 against US dollar.

US President Donald Trump said that not all levies will be imposed on April 2; some countries may get a break, which eased some tension among investors regarding tariff uncertainty, Reuters reported.

On Monday, the rupee ended at over two-month high of 85.64 against the greenback. "The Indian rupee extended its upward momentum, closing at 85.6350 against the U.S. dollar after briefly touching an intraday high of 85.50—effectively wiping out its losses for the year. This strength was supported by sustained foreign inflows, strong corporate repatriations ahead of the financial year-end, and persistent dollar selling by foreign banks," said Abhishek Goenka, founder and CEO, India Forex & Asset Management.

Adding to the positive sentiment, the Reserve Bank of India’s $10-billion FX swap auction saw bids more than double the offer size, with a cutoff premium of Rs 5.86. The move aims to inject rupee liquidity into the banking system and is part of a broader strategy that includes open market operations and long-term repos, Goenka said.

The dollar index, which gauges the strength of the US currency against six major currencies, extended gains to fifth consecutive session. Strong services PMI data boosted the US currency.

As of 9:04 a.m., the dollar index was trading 0.04% higher at 104.31.

Crude oil prices rose to the highest level since March 3 on Monday as Trump said that levies will be imposed on countries who buy oil from Venezuela. In Asia session, crude oil prices fell slightly but were trading close to three-week high.

As of 9:05 a.m., May future contract of brent crude was trading flat at $73.01 a barrel.

"As we approach the month end there could be a sharp fall in the rupee due to month end positioning unless RBI has some other plans. Exporters to wait for better levels to hedge. However, if 85.50 breaks decisively then maybe we are approaching 84.75," said Anil Kumar Bhansali, head, treasury and executive director, Finrex Treasury Advisors LLP.