The Indian rupee saw a positive move on Friday, rising 16 paise to close at 85.39 against the US dollar. The appreciation came as the American currency weakened in global markets and crude oil prices dipped, giving a boost to the local unit.
Forex traders noted that Asian currencies, including the rupee, benefited from renewed hopes of favorable trade deals with the US. President Donald Trump’s recent trade agreement with Vietnam stirred optimism, suggesting more such deals could follow ahead of the July 9 deadline.
At the interbank foreign exchange market, the rupee opened at 85.44 against the dollar. It fluctuated within a tight band, touching an intra-day high of 85.30 and a low of 85.50 before settling at 85.39. This marked an improvement from Thursday’s close of 85.55, where it had edged up just 7 paise.
Analysts believe the rupee could extend its gains if the US dollar continues to soften and crude oil remains under pressure. However, market watchers caution that lingering uncertainties over trade tariffs may limit sharp upward movements. Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, expects the USDINR spot price to trade in a range of 85.10 to 85.70 in the near term.
The dollar index, which measures the US currency’s strength against a basket of six peers, slipped 0.24% to 96.94, reflecting broad-based weakness. Meanwhile, Brent crude futures dropped by 1.18% to $67.99 per barrel, easing pressure on import-dependent economies like India.
Domestic equities also saw modest gains, with the Sensex rising 193.42 points (0.23%) to close at 83,432.89 and the Nifty climbing 55.70 points (0.22%) to 25,461.00. However, foreign institutional investors (FIIs) remained cautious, offloading shares worth Rs 1,481.19 crore on a net basis.
On the economic front, India’s services sector showed strong momentum in June, hitting a ten-month high. The HSBC India Services PMI Business Activity Index climbed to 60.4, up from 58.8 in May, driven by robust demand and increased international sales. The positive data further reinforced optimism about economic resilience.
As the rupee navigates global trade winds, investors remain watchful of currency movements and energy price trends. The interplay between a weakening dollar and favorable domestic indicators could keep the rupee buoyant in the near term.