Currency Market News: Rupee extends rally for third session, closes at 85.68 vs dollar

Rupee sustained its upward momentum for the third consecutive session, closing 12 paise higher at 85.68 (provisional) against the US dollar on Wednesday. The rally was supported by renewed foreign fund inflows and a weaker greenback.

Forex traders attributed the rupee’s strength to upbeat domestic macroeconomic data and a 90-day pause on US reciprocal tariffs, which triggered broad-based buying in equities. Additionally, easing crude oil prices in the international market lent further support to the local unit.

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At the interbank foreign exchange market, the rupee opened at 85.66 and traded within a range of 85.50 to 85.72 against the US dollar. It eventually settled at 85.68, gaining 12 paise from its previous close.

On Tuesday, the rupee had strengthened by 30 paise to close at 85.80, following a sharp 58 paise gain in Friday’s session.

Expert view

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, noted that the rupee traded higher on the back of dollar weakness, closing at 85.62 with gains of 12 paise. He said: "The dollar index slipped below the 100-mark, boosting emerging market currencies. FII inflows of over Rs 6,000 crore into Indian markets have improved sentiment, driven by easing global trade tariff concerns and India’s relatively resilient position amid ongoing trade tensions."

He added that the rupee has quietly appreciated over 1 per cent over the past week, supported by external tailwinds from a softening dollar and improving capital flows domestically. However, he cautioned that volatility may persist due to lingering global trade war uncertainties.

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Trivedi expects the rupee to trade in the range of 85.25–86.25 in the near term, with further cues likely to come from global trade developments and capital market trends.

Global market indicators

The US dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.57 per cent at 99.39—its lowest level since March 2022.

Meanwhile, Brent crude futures rose 0.88 per cent to USD 65.24 per barrel, hovering around levels last seen in April 2021.

Stock market summary

Indian equity markets ended higher on April 16, buoyed by broad-based buying across sectors, except auto. The Nifty50 closed above the 23,400 mark at 23,437.25, up 91.55 points, while the Sensex gained 309.83 points to settle at 76,972.85.

Foreign institutional investors (FIIs) were net buyers, pumping Rs 6,065.78 crore into Indian equities on Tuesday, according to exchange data.

(With inputs from PTI)