Rupee Opens Stronger Against US Dollar For Third Session
Rupee closed on a muted note on Wednesday as it weakened by 6 paise to close at 86.89.
The Indian rupee opened stronger against the US dollar on Thursday, appreciating by 9 paise to start at 86.80. This follows a muted performance on Wednesday, when the rupee weakened by 6 paise to close at 86.89.
Earlier in the week, the rupee had shown significant volatility. On Tuesday, it closed at 86.83. It had opened at 87.35, recovering from a sharp drop to 87.92 on Monday due to new US tariffs on steel and aluminum imports. The US administration’s 25% tariff announcement had triggered a flight to safety, boosting the dollar.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, noted that the rupee closed at 86.8925 and was expected to open at 86.85, with a trading range of 86.70 to 87.20 for the day. He advised exporters to sell near 87.50 and importers to wait for further dips to buy.
The rupee’s movement will also be influenced by the talks between Prime Minister Modi and President Trump on trade tariffs. Bhansali mentioned that the rupee was sold off from 86.46 to 86.92 as importers, oil companies, and possibly the RBI stepped in to buy dollars, pushing the rupee higher by 46 paise, though it closed slightly lower at 86.8925.
Brent oil prices fell to $74.53 per barrel due to potential developments in the Ukraine deal and hawkish comments from the Federal Reserve. Rising US stockpiles also contributed to the price drop. Bhansali highlighted that the macro environment weighed on sentiment, with Federal Reserve Chair Jerome Powell indicating no rush to cut rates after a 100 bps rate cut last year. Additionally, profit-taking occurred after President Trump initiated steps to end the war by calling up President Putin.
The rupee’s direction will depend on the outcomes of the Modi-Trump talks and the Reserve Bank of India’s interventions in the currency market.
