Rupee Strengthens for Second Consecutive Day, Closing at 94.33
The Indian rupee strengthened for the second consecutive session on Friday, closing 7 paise higher at 94.33 against the US dollar. This rise was fueled by optimism surrounding ongoing trade negotiations between India and the US. However, a stronger dollar and ongoing geopolitical uncertainties limited further gains. The local currency opened at 94.30 and fluctuated between 94.20 and 94.52 during the trading session.
Forex traders noted that the rupee found support from expectations that discussions on an interim trade agreement between India and the US would accelerate. Indian Foreign Secretary Vikram Misri indicated that trade was a key topic during recent talks between Prime Minister Narendra Modi and US President Donald Trump. Both leaders urged negotiators to expedite efforts to finalize the proposed trade pact.
Despite the positive sentiment, caution prevailed in the market due to developments related to the US-Iran peace process. Reports emerged that US Vice President JD Vance postponed his planned visit to Switzerland for talks with Iranian negotiators, citing logistical reasons.
The rupee has emerged as a strong performer among Asian currencies, bolstered by increased capital inflows and declining oil prices. Dilip Parmar, a research analyst at HDFC Securities, stated that the rupee could trend towards 94, supported by dollar inflows. He noted that the USDINR spot is currently facing resistance at 94.90 and support at 94.10.
Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, mentioned that the currency rebounded from intraday weakness and is likely to remain range-bound in the coming week. He projected a trading range of 94 to 95 for the rupee as the market awaits further developments on the US-Iran situation over the weekend.
In related market activity, the dollar index was down 0.08% at 100.76, while Brent crude oil prices fell 0.65% to USD 79.33 per barrel. On the domestic equity front, benchmark indices closed sharply lower, with the Sensex dropping 607.08 points to 76,802.90 and the Nifty declining 154.90 points to 24,013.10. Foreign institutional investors were net buyers, acquiring equities worth Rs 4,859.07 crore during the session. Misri’s comments followed a significant meeting between Modi and Trump on the sidelines of the G7 Summit, their first interaction in 16 months. He noted that substantial progress had been made on the interim trade agreement, with US Trade Representative Jamieson Greer scheduled to visit India next week to further the negotiations.
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