Currency Market News: Rupee hits 7-month high before retreating; closes nearly flat at 84.53 vs US dollar
Rupee on Friday climbed to a seven-month high, briefly breaching the 84-per-dollar mark, buoyed by sustained foreign fund inflows and strong domestic economic indicators. However, it failed to hold onto the gains and ended the day just 1 paisa stronger at 84.53 against the US dollar.
In a session marked by volatility, the rupee touched an intra-day high of 83.76 — its strongest level since October 2024 — before slipping back. It opened at 83.98 and moved in a range of 83.76 to 84.55 through the day.
Traders attributed the initial surge to record-high goods and services tax (GST) collections of Rs 2.37 lakh crore in April and robust manufacturing data. India’s manufacturing PMI rose to a 10-month high of 58.2 in April, reflecting strong demand and healthy order books.
However, profit booking and geopolitical caution — particularly concerns around tensions between India and Pakistan — weighed on the Indian rupee later in the day, trimming the early gains. On Wednesday, the Indian rupee had posted a sharp 42-paise jump to close at 84.54. The forex market remained shut on Thursday due to Maharashtra Day.
“Indian rupee appreciated sharply to the highest levels since October 2024 on the back of FII inflows and dollar selling by foreign banks,” said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan. He expects the Indian rupee to retain a positive bias, supported by softening crude prices, strong domestic markets, and weakness in the US dollar following subdued US economic data.
Choudhary added that the Indian rupee’s near-term trajectory would depend on upcoming US data releases, including non-farm payrolls and factory orders. The USDINR spot rate is expected to trade in the 83.70 to 84.50 range.
The dollar index, which measures the greenback against six major currencies, dropped 0.39 per cent to 99.85, while Brent crude futures fell 0.51 per cent to USD 61.81 per barrel.
Stock market summary
Indian equities ended slightly higher on May 2 after a choppy trading session, with the Nifty closing above the 24,300 mark. Gains in Adani Ports, IndusInd Bank, Bajaj Finance, and Maruti provided support, while JSW Steel, Eicher Motors, and Hero MotoCorp weighed on the index. The BSE Midcap index slipped 0.4 per cent, while smallcaps remained largely unchanged.
Foreign institutional investors were net buyers to the tune of Rs 50.57 crore on Wednesday, according to exchange data.
Meanwhile, the Centre highlighted a 12.6 per cent year-on-year jump in April GST collections as a sign of economic resilience and effective cooperative federalism. April 2024 saw a gross GST collection of Rs 2.10 lakh crore — the second-highest since the indirect tax regime began in 2017 — while net collections for April 2025 stood at Rs 1.92 lakh crore.
(With inputs from PTI)
