The Indian Rupee strengthened by 22 paise to close at 86.22 (provisional) against the US dollar on Friday, supported by a decrease in the US dollar index which boosted investor confidence. The local currency also benefited from lower crude oil prices, although continuous foreign fund outflows put pressure on the rupee.
Market participants are closely watching the upcoming Union Budget as it will have a significant impact on market sentiment and the trajectory of the rupee. Starting the day strong at 86.31 against the greenback, the rupee reached an intraday high of 86.16 and a low of 86.36 before closing at 86.22, marking a 22 paise gain from the previous close.
On Thursday, the rupee had slipped by 9 paise to settle at 86.44 against the US dollar. The dollar index, which measures the strength of the greenback against a basket of six currencies, was down by 0.56 percent at 107.44.
CR Forex Advisors’ MD Amit Pabari mentioned that the recent surge in the Dollar Index, reaching a high of 110, is unlikely to be sustained as global uncertainties ease and risks related to Trump diminish. President Trump’s call for an immediate interest rate cut by the Federal Reserve at the World Economic Forum in Davos could generate negative sentiment for the Dollar Index.
Meanwhile, Brent crude, the global oil benchmark, rose by 0.47 percent to $78.66 per barrel in futures trading. Trump’s request to Saudi Arabia to lower oil prices in order to influence Russia’s actions in the war, along with threats of sanctions against Russia, had an impact on oil prices.
In the domestic market, the BSE Sensex fell by 329.92 points to close at 76,190.46 points, while the Nifty dropped by 113.15 points to 23,092.20 points. Foreign Institutional Investors (FIIs) continued to be net sellers in the capital markets, offloading shares worth ₹5,462.52 crore on Thursday.
