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Rupee Opens Weaker Against US Dollar

Rupee is expected to trade in the range of 85.50 and 86.25.

<div class="paragraphs"><p>Rupee starts weak against US dollar. (Photo source: Pralhad Shinde/NDTV Profit).</p></div>
Rupee starts weak against US dollar. (Photo source: Pralhad Shinde/NDTV Profit).

The Indian rupee opened 3 paise weaker against the US dollar at 86.01 on Wednesday, compared to its previous close of 85.98 a dollar on Tuesday, according to Bloomberg.

Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, noted, "The range for the day is expected to be between 85.50 and 86.25. Exporters should sit tight, while importers may start hedging for the near term."

Brent oil prices saw a slight increase to $67.06 after falling in the last two sessions. "The focus is on whether a US-brokered ceasefire between Israel and Iran will hold. Industry data signals another week of bumper US inventory draws, which helped oil prices recover slightly as demand in the world's largest consumer appeared to be picking up," Bhansali explained.

The dollar struggled to regain lost ground as investors latched onto the optimism of a fragile truce between Iran and Israel. "The White House is close to announcing a few more trade deals, raising optimism for risky assets," Bhansali said.

"All indices on Wall Street were up overnight, and the optimism continued in Asia with Nikkei up 0.37%, Hang Seng 0.86%, and China was almost flat. Investors sold the dollar, causing it to fall to 97.86, while the Euro rose to 1.1626, GBP to 1.3623, and JPY to 144.71. Gold, which had fallen to almost $3,300, rose to $3,332 per ounce," he said.

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Bhansali also highlighted the recent performance of the Indian rupee. "The rupee was up from a low of 86.86 the day before to 85.91 yesterday. Anchor investors of HDB Financial Services raised Rs 3,369 crore, bringing in foreign capital. On Wednesday, retail, HNI, and other investors will participate in the IPO, potentially leading to further appreciation of the rupee."

Overall, the dollar-rupee pair is expected to remain within the range of 85-87, with market participants awaiting the RBI's monthly report on the Real Effective Exchange Rate for May 2025 and the Current Account status for the quarter ended March 31, 2025, which is expected to show a surplus, he noted.

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