Rupee Opens Strong Against US Dollar
Rupee's range for the day is expected to be between 85.75 and 86.75.
The Indian rupee opened 64 paise stronger against the US dollar on Tuesday, trading at Rs 86.11 compared to its closing rate of Rs 86.75 on Monday.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, commented on the day's trading range, suggesting exporters to sit tight and importers to start hedging for the near term. He noted that rupee's trading range for the day is expected to be between 85.75 to 86.75.
The market has reacted positively to US President Trump's announcement of a ceasefire between Israel and Iran, although Iran has yet to confirm this. The ceasefire news led to a drop in oil prices, with Brent crude falling below $70, currently at $69.08 per barrel, Bhansali said.
Trump congratulated both nations for their efforts to end the 12-day conflict, which has influenced global financial markets.
The dollar index fell to 98.20, and the US 10-year yield dropped to 4.35%. Major US indices, including the Dow Jones and S&P 500, saw gains of 0.89% and 0.96%, respectively. Gold prices fell by 0.70% to $3,351.18 per ounce due to a risk-on market positioning.
Asian Pacific markets also rose following the ceasefire announcement, with Nikkei up 0.90%, Hang Seng rising 1.84%, and China advancing 1.28%. Kospi climbed 2.74%, while Gift Nifty increased by 217 points. Among currencies, Chinese Yuan rose to 7.1761, Indonesian Rupiah to 16,371, and Korean Won to 1,367.
Despite some missile activity over US bases in Qatar and Iraq, which appeared more symbolic than threatening, oil prices continued to decline, Bhansali noted. The markets are now awaiting Federal Reserve Chairman Powell's testimony, which may indicate potential rate cuts.
Additionally, the IPO of HBD Financial is expected to bring in good inflows, potentially pushing the dollar-rupee exchange rate below 86.00 levels, Bhansali said.
