The Indian rupee opened 17 paise stronger against the US dollar on Thursday, trading at Rs 85.92 compared to its previous close of Rs 86.09 on Wednesday. The trading range for the day is expected to be between Rs 85.75 and Rs 86.25.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, advised exporters to hold their positions while importers may start hedging for the near term.
Brent oil prices edged higher, reaching $67.86 per barrel, driven by a significant US inventory drawdown and a weaker US dollar. The greenback experienced further losses following reports that US President Donald Trump might announce a successor to Fed Chairman Powell sooner than expected, potentially undermining Powell and spurring expectations for interest rate cuts, Bhansali noted.
The truce between Iran and Israel appears to be holding, reducing supply disruptions in the Middle East. Consequently, the Dollar Index fell to 97.48, while the Euro rose to 1.1687, Great British Pound to 1.3693, and Japanese Yen to 144.73.
Bhansali noted that the market is concerned about the independence of the Fed, which could affect confidence in US monetary policy. Powell's cautious stance on monetary policy, due to Trump's tariff plans posing a risk to inflation, was criticised by Trump for not lowering interest rates sharply.
In the stock market, Nasdaq moved up yesterday, while Dow and S&P fell. This morning, Nikkei rose by 1%, Hang Seng fell by 0.62%, and China dropped by 0.32%. Gift Nifty showed an uptick of 12 points after yesterday's rally. Among currencies, China's Yuan rose to 7.1676, Indonesian Rupiah to 16,280, and Korean Won to 1,360 following the fall of the Dollar Index. Gold remained stable at $3,331.64 per ounce.
Bhansali also mentioned that the RBI's short position fell to $73 billion in the monthly bulletin, with outstanding positions for up to three months down to $15 billion, providing comfort to the RBI in case of a run on the rupee by selling dollars.
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