The Indian rupee appreciated 33 paise to 85.05 against the US dollar in early trade on Monday, driven by a weaker dollar index and positive domestic equities. Read more.
Forex traders said a positive trend in domestic equities and foreign fund inflows boosted investors’ sentiments.
Traders said the Indian rupee has gained significant ground over the last few trading sessions on encouraging domestic indicators and changing global tides that have kept the rupee steady, even as uncertainty swirls around major world economies.
At the interbank foreign exchange, the domestic unit opened at 85.15 then rose to 85.05 against the greenback in early deals, registering a gain of 33 paise over its previous closing level.
On Thursday, the rupee closed 26 paise higher at 85.38 against the US dollar.
The Forex market was closed on Friday on account of Good Friday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading lower by 0.92 per cent at 98.31.
The US dollar has been facing sustained pressure, with the Dollar Index (DXY) down over 9 per cent year-to-date. This reflects growing expectations that the Federal Reserve may eventually be forced to pivot.
“While Fed Chair Jerome Powell has maintained a cautious stance, signalling no immediate rate cuts, mounting political pressure — especially from President Donald Trump — is pushing for lower rates to support growth,” CR Forex Advisors MD Amit Pabari said.
Brent crude, the global oil benchmark, fell 1.47 per cent to USD 66.96 per barrel in futures trade.
“With India offering strong forex reserves, steady inflation, and competitive interest rates, the rupee is increasingly becoming a beneficiary of this global repositioning,” Pabari said.
Looking ahead, the USDINR pair is expected to trade within the 85.00-85.50 range. A decisive break below 85.00 could open the door for further sharp appreciation of the rupee, he added.
In the domestic equity market, the 30-share BSE Sensex rose by 482.87 points, or 0.61 per cent, to 79,036.07, while the Nifty advanced 146.85 points, or 0.62 per cent, to 23,998.50.
Foreign institutional investors (FIIs) bought equities worth Rs 4,667.94 crore on a net basis on Thursday, according to exchange data.
Meanwhile, India’s forex reserves increased by USD 1.567 billion to USD 677.835 billion for the week ended April 11, the Reserve Bank said on Friday.
This is the sixth consecutive week of a rise in the kitty. The overall reserves jumped by USD 10.872 billion to USD 676.268 billion in the previous reporting week ended April 4.