Rupee gains 1 paisa to close at 86.36 against US dollar

The rupee appreciated by 1 paisa to close at 86.36 (provisional) against the US dollar on Thursday, supported by positive domestic equities and strong foreign inflows into debt markets. 

While external pressures persist, forex traders noted that the Indian currency has gained strength amid steady market sentiment. However, risks remain due to continued foreign institutional investor (FII) sell-offs and uncertainty surrounding Trump's tariff stance, which could impact the rupee’s upward movement.  

At the interbank forex market, the rupee opened at 86.39, touching an intraday high of 86.20 and a low of 86.41 before closing at 86.36 against the greenback. On Wednesday, the currency had gained 19 paise to settle at 86.37. 

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said the rupee traded slightly higher at 86.34, supported by a weaker dollar index after the Federal Reserve hinted at a lower rate outlook, boosting overall market sentiment. He also noted that steady crude oil prices and positive trends in secondary markets further supported the rupee.

According to him, the currency is expected to trade in the range of 86.10-86.75, with global cues and capital flows influencing its movement.  

Vinod Nair, Head of Research at Geojit Financial Services, pointed out that the US dollar’s decline has reduced the intensity of FII outflows, while domestic institutional investor (DII) buying remains strong. 

"Supportive domestic data indicating a MoM rise in economic activity and the view that more rate cuts are envisaged during the year are adding to the attractiveness of equity. The sustenance of the ongoing rally is expected to stay for the broad market in the short term and then drive based on the outlook on Q4FY25 results, to be released in April," he added.

Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.46 percent to 103.90. Brent crude prices edged up 0.10 percent to 70.85 dollars per barrel in futures trade. 

Stock market summary: Sensex jumps 899 points, Nifty tops 23,190 

Meanwhile, Indian equities extended gains for the fourth consecutive session, buoyed by the Federal Reserve’s growth-focused stance and signals of future rate cuts in 2025. The Nifty 50 surged 283.05 points or 1.24 percent to close at 23,190.65, while the Sensex climbed 899.01 points or 1.19 percent to settle at 76,348.06.

 (With Inputs from PTI)