Rupee Closes Stronger Against US Dollar
The Indian unit closed 65 paise higher to close at 86.05 against US dollar.
The rupee closed stronger against the greenback, as the dollar index hit over two-year low. The Indian unit closed 65 paise higher to close at 86.05 against US dollar.
Financial markets in India were closed on Thursday on account of Mahavir Jayanti on Thursday. The rupee settled at over four-week low of 86.70 against the US dollar on Wednesday.
The Indian unit opened 45 paise higher at 86.25 a dollar. The Indian unit jumped 75 paise to the day's high of 85.95 against the dollar. After posting the biggest single-day fall Thursday, the dollar index slipped below 100-mark and fell to 99.01, the lowest level since April 5, 2023.
"The key driver behind the dollar’s sharp depreciation was the unexpected easing in US inflation, which cooled to 2.4% from the previous 2.8%, while core inflation slipped to 2.8%—its lowest level since April 2021. This softer inflation print increased the likelihood of further rate cuts by the Fed, weakening the greenback," said Amit Pabari, managing director CR Forex Advisors.
Moreover, traders pulled out money from US assets as its tension with China rose. Both the countries are raising tariff on each others' exports as they refused to concede. In latest development, China increased tariff on US exports to 125%.
As of 3:45 p.m., the dollar index was trading 1.10% down at 99.76.
Crude oil futures were trading near four-year low, which continued to support the Indian currency. Aggressive tariff policy was fuelling recession fears despite US President Donald Trump declaring a 90-day pause.
The June future contract of brent crude was trading 0.62% up at $60.40 a barrel on Intercontinental Exchange as of 3:46 p.m.
