The rupee extended its gains for the third consecutive session, closing 26 paise higher at 86.55 (provisional) against the US dollar on Tuesday. This appreciation was supported by positive domestic equity markets and a weaker American currency. The US dollar weakened on disappointing economic data, while Asian currencies also strengthened, further aiding the rupee. However, gains were capped by a surge in crude oil prices.
The rupee experienced high volatility at the interbank foreign exchange, opening at 86.71, reaching a high of 86.54, and a low of 86.78 against the dollar before closing at 86.55 (provisional), marking a gain of 26 paise from the previous close.
This marks the third consecutive session of gains for the rupee, totaling 67 paise over the period. Looking ahead, the rupee is expected to trade with a positive bias due to positive global equities and a weak American currency. However, rising crude oil prices and FII outflows may limit significant upside potential. Traders will also be watching for data on industrial production and the housing sector from the US.
On the global front, the dollar index was trading 0.04% lower at 103.32, while Brent crude rose 1.31% to $72 per barrel in futures trade. On the domestic front, India’s trade deficit fell to a three-and-a-half-year low, with exports contracting sharply and imports also declining significantly.
Investors may approach the market cautiously ahead of the Federal Open Market Committee (FOMC) meeting, with the USD-INR spot price expected to trade in a range of 86.30 to 86.80. Additionally, US President Donald Trump’s plans for reciprocal tariffs could create further pressure on the rupee.
In the domestic equity market, the Sensex and Nifty both registered gains, with foreign institutional investors offloading equities worth ₹4,488.45 crore on a net basis on Monday.
Published on March 18, 2025.
