Rupee Closes Stronger Against US Dollar
The Indian Rupee had risen by 2 paise, opening at 86.56 against the dollar at market open.
Rupee closed stronger against the US dollar as it strengthened by 26 paise to close at 86.33.
At market open, the domestic currency gained against the US Dollar on Wednesday, as markets continued to evaluate President Trump's first-day actions regarding tariffs and oil production. The domestic currency rose by 2 paise, opening at 86.56 against the dollar, compared to the previous day's closing of 86.58, according to Bloomberg data.
Meanwhile, the dollar index, which tracks the greenback's strength against six major currencies, edged 0.08% low, reaching 107.97. In the commodity markets, March futures of WTI crude rose 0.38%, trading at $76.21 per barrel, while Brent crude futures for March rose 0.41% to trade at $79.70 per barrel.
Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors, noted that the market was weighing the potential impact of President Trump's declaration of a national energy emergency on his first day in office. Trump's aggressive stance to boost oil production, coupled with his withdrawal from the Paris Climate Agreement and rollback of environmental protections, has reinforced his campaign mantra of 'Drill Baby Drill'.
"The Federal Reserve’s data-dependent stance remains intact, with market consensus leaning toward a possible June rate cut," said Kunal Sodhani of Shinhan Bank. "For USDINR, 86.30 acts as a support while 86.65 a resistance."
Four key global macro events are set to shape the future of the Indian rupee — the pace of Trump’s tariffs, a potential pause by the Federal Reserve, China's response, and the Bank of Japan's interest rate hike.
Policymakers are pinning hopes on external factors, such as the surge in inward remittances during the January-March quarter and India's inclusion in the Global Bond Indices, to bring in sufficient dollars and mitigate the rupee's challenges.
