Rupee made a strong comeback in early trade on Friday, rising by 51 paise to 86.17 against the US dollar. This sharp gain was fueled by a positive opening in domestic equity markets, a weaker greenback, and a drop in global oil prices.
The rally in the local currency follows US President Donald Trump’s decision to suspend the additional 26 per cent tariffs on Indian goods until July 9, easing trade tensions between the two nations.
At the interbank foreign exchange market, the rupee opened at 86.22 against the dollar—46 paise stronger than its previous close of 86.68 on Wednesday. It then extended its gains to reach 86.17. Markets were closed on Thursday for Mahavir Jayanti.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said the rupee is expected to remain strong, possibly rising past the 86 mark, as the dollar index dips below its September low of 100.20. He anticipates a further decline in the index to the 95 level. Exporters have taken advantage of the uptick to hedge their positions, and any rise due to global risk aversion should be used for further cover, Bhansali noted. He expects the rupee to trade between 86.00 and 86.60 through the day.
The dollar index, which tracks the greenback against six major currencies, slipped 0.81 per cent to 100.04. Bhansali attributed the drop to fading investor confidence in the US economy, pushing them toward safe havens like the Swiss franc, Japanese yen, euro, and gold. The dollar fell to its lowest level in decades against the Swiss franc.
Meanwhile, Brent crude, the global oil benchmark, eased 0.27% to USD 63.16 per barrel in futures trade, providing additional support to the rupee.
Also Read: First Trade: Sensex climbs over 980 points, Nifty at 22,695
Stock market snapshot
Despite weak global cues, Indian equities opened on a bullish note Friday. The Nifty50 jumped 296 points to 22,695 at the open, while the BSE Sensex surged 988 points to start the day at 74,835. Broader markets mirrored the uptrend, with both the small-cap and mid-cap indices gaining over 1%.
However, foreign institutional investors (FIIs) remained cautious, offloading equities worth ₹4,358.02 crore on Wednesday, as per exchange data.
(With inputs from PTI)
