Rupee Gains 16 Paise to 85.39 on Dollar Weakness, Falling Oil Prices

Mumbai, July 4, 2025: The Indian Rupee strengthened by 16 paise to settle at 85.39 against the US dollar on Friday. This was after a softer greenback in the global market and reduced crude oil prices. This change will reduce India’s import cost burden, aiding currency stability.

At  04:30 PM, one USD was priced at ₹85.39.

Greenback Weakens, Boosts Emerging Currencies

At the interbank foreign exchange market, the rupee opened at 85.44 and traded within a narrow range, reaching an intraday high of 85.30 and a low of 85.50. It eventually closed at 85.39, marking a notable recovery from Thursday’s close of 85.55.

The dollar index, which measures the US currency against six major peers, dropped 0.24 per cent to 96.94, enhancing sentiment for emerging market currencies like the rupee.

Crude Oil Retreat Adds Tailwind

Brent crude futures, the global benchmark, declined 1.18% to USD 67.99 per barrel, further supporting the rupee. Lower crude prices ease concerns over India’s import bill and inflation, both of which influence currency sentiment.

Trade Deal Optimism Lifts Asian Currencies

Asian currencies gained broadly following US President Donald Trump’s announcement of a trade agreement with Vietnam, sparking optimism that more deals could follow before the July 9 tariff deadline. This bolstered risk appetite and boosted the rupee alongside its regional peers.

Equity Markets, Services PMI Support Sentiment

Domestic equities also offered support, with the BSE Sensex climbing 193.42 points to 83,432.89 and the NSE Nifty gaining 55.70 points to 25,461.

On the macroeconomic front, India’s services sector showed strong momentum, with the HSBC India Services PMI rising to 60.4 in June from 58.8 in May. This ten-month high was attributed to a surge in international sales and hiring activity.

FIIs Remain Cautious

Despite the positive cues, foreign institutional investors (FIIs) continued their cautious stance, offloading equities worth Rs 1,481.19 crore on Thursday, as per exchange data.

Outlook: Capped Gains Amid Tariff Uncertainty

Analysts expect the rupee to continue benefiting from the weakening US dollar and subdued oil prices, but caution that trade tariff uncertainty could cap further appreciation. The USDINR spot rate is likely to trade between 85.10 and 85.70 in the near term.

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