Rupee Reaches Three-Month High Against US Dollar

The Indian rupee has marked a significant milestone by closing at its highest level in three months against the US dollar. As trading wrapped up, the rupee appreciated by 33 paise, settling at 85.46 against the dollar.

Key Factors Behind Rupee's Strength

According to Abhishek Goenka, founder and CEO of India Forex & Asset Management, a crucial factor contributing to the strengthening of the Indian rupee is the Reserve Bank of India (RBI). The RBI has been advising banks against making large arbitrage bets between the onshore and offshore markets, which has helped stabilize the rupee. Additionally, the RBI recently conducted a $10 billion foreign exchange (FX) swap auction that was twice oversubscribed, further enhancing liquidity and market confidence. Remarkably, the rupee has regained approximately 50% of its depreciation from 2024.

Daily Trading Highlights

At the day's opening, the rupee rose by 13 paise to 85.66 against the US dollar. During the latter half of the trading session, the Indian currency jumped by 38 paise, reaching a peak of 85.41. Throughout the trading day, the dollar index remained stable, indicating cautious market sentiments as investors awaited the release of the US Personal Consumption Expenditure (PCE) index.

Current Market Conditions

As of 3:28 PM, the dollar index was marginally up by 0.07%, positioned at 104.41. Meanwhile, crude oil prices trended downward, supporting the Indian rupee. At 3:30 PM, the June future contract for crude oil was priced at $74.05 per barrel, slightly higher by 0.03%.

Market Predictions

Analyst Amit Pabari, managing director of CR Forex Advisors, suggested that given the prevailing global and domestic market conditions, the USD/INR pair is likely to find considerable support between the 85.40 to 85.50 range. On the upside, the 85.90 level may act as a crucial resistance point; a breakthrough here could pave the way for further movement towards the 86.40 to 86.50 range.

In contrast, earlier reports had shown the domestic unit closing 7 paise weaker at 85.78 against the US dollar on Thursday, according to data from Bloomberg.

rupee, dollar, economy