The Indian rupee showed strength on Friday, although it lost its initial gains and finally strengthened by six paise at 94.34 (provisional) per dollar. The strengthening of the dollar and rise in crude oil prices put pressure on investor sentiment. Foreign exchange traders said that the rupee initially opened with a positive trend. The domestic currency got support amid expectations of acceleration in trade talks between India and America. However, market sentiment weakened amid uncertainty over the US-Iran peace deal.
In the interbank foreign exchange market, the rupee opened at 94.30 against the US dollar. During trading it remained in the range of 94.20 to 94.52 per dollar. Ultimately it settled at 94.34 (provisional) per dollar, which is an increase of six paise from the previous closing price. The rupee strengthened by 10 paise and closed at 94.40 per dollar on Thursday.
Rupee will show strength in future also
Dilip Parmar, research analyst at HDFC Securities, said, the rupee remains better among the currencies of other major countries of Asia, which has been strengthened by the increase in capital inflows and softening of crude oil prices. With risk-on sentiment again dominating, we believe the local rupee will move towards 94 levels based on dollar inflows. The spot price of rupee against dollar may remain between 94.90 to 94.10.
Why did the rupee fall?
Meanwhile, the dollar index, which gauges the US dollar’s position against six major currencies, stood at 100.76, down 0.08 per cent. In the domestic stock markets, Sensex fell by 607.08 points to close at 76,802.90 points while Nifty fell by 154.90 points and closed at 24,013.10 points. The price of international standard Brent crude fell by 0.65 percent to around $ 79.33 per barrel. According to stock market data, foreign institutional investors (FIIs) were net sellers on Thursday and sold shares worth Rs 1,025.20 crore. It is noteworthy that Indian Foreign Secretary Vikram Misri said on Thursday that trade was a major topic of discussion between Prime Minister Narendra Modi and US President Donald Trump. Both the leaders have instructed their respective negotiators to finalize the proposed trade agreement as soon as possible. While US Vice President J.D. Vance has postponed a trip to Switzerland where talks were to be held with Iranian negotiators. Logistical problems have been cited for this.
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