The Indian rupee opened 4 paise stronger at 85.97 against the US dollar on Friday, recovering from its previous close of 86.01 on Thursday. This slight appreciation comes amid various global and domestic economic factors influencing the currency markets.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, provided insights into the day's trading range and hedging strategies. "The range for the day is expected to be between 85.50 and 86.25. Exporters can hedge at 86.25, while importers may wait to hedge," he advised.
Brent oil prices are set for another weekly drop as OPEC+ reportedly considers a production boost in July during its upcoming meeting on June 1. Brent oil prices were hovering at $63.95 per barrel. Additionally, the US Supreme Court's recent decision that the Federal Reserve is unique and President Trump cannot fire its Chairperson Powell, has helped soothe concerns in the matter, Bhansali said.
Asia – Pacific markets mostly climbed on Friday as investors assessed a slew of economic data from the region. Japan's core inflation rose to 3.5% in April, bolstered by rising rice prices.
The Nikkei was up by 0.68%, Hang Seng by 0.38%, and China by 0.05% after the Dow ended almost flat overnight.
Bhansali also noted that the Indian rupee fell to a low of 86.11 as stop losses triggered once the 85.70 level was breached. The demand was mainly driven by foreign portfolio investors and oil companies, along with some defence and government payments.
"We continue with our call to sell dollars as India continues to perform well on other fundamentals, indicated by yesterday's PMI, which came in better than expected, particularly the Service PMI. The rupee's range for today is between 85.75 and 86.25, with upticks on the dollar to be sold by exporters while importers keep a watch until their level is achieved," Bhansali added.
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