Rupee Rises 17 Paise to 86.24 Against US Dollar Amid Weak Greenback, Market Caution Persists

Mumbai, July 24 – The Indian rupee gained 17 paise to open at 86.24 against the US dollar in early trade on Thursday, buoyed by a softer dollar overseas. However, broader market sentiment remained cautious due to ongoing uncertainties in global trade negotiations.

The raise can be attributed to subdued US data and cautious investor positioning ahead of key central bank meetings. Reduced bets on Fed rate hikes and stronger Asian currencies are also supporting factors for the gains.

Rupee Tracks Weaker Dollar

At the interbank foreign exchange market, the rupee began the session at 86.33 and strengthened to 86.24 against the greenback, marking an improvement from Wednesday’s close of 86.41.

The dollar index, which tracks the currency against a basket of six peers, edged lower by 0.06% to 97.15. Ahead of the August 1 deadline, the market is closely watching progress in international trade negotiations, especially the India-US and US-EU talks.

Domestic Headwinds Limit Gains

Despite the tailwinds from a weaker dollar, the rupee’s upward movement was capped by a combination of factors including:

• Weak domestic equities: The BSE Sensex dropped 124.79 points to 82,601.85 while the NSE Nifty slipped 15.75 points to 25,204.15.
• Foreign fund outflows: FIIs net sold Indian equities worth ₹4,209.11 crore on Wednesday, as per exchange data.

Forex traders noted that the uncertainty surrounding the India-US trade pact continues to keep the rupee rangebound. Significant dollar demand in the system has also limited any substantial appreciation of the currency.

Brent Crude and Global Factors

Brent crude futures inched up by 0.25% to USD 68.68 per barrel, supported by trade optimism following a concluded US-Japan deal and progress in US-EU negotiations. However, geopolitical tensions between Russia and Ukraine and lack of breakthrough in US-China talks continue to cap gains.

Outlook: Rangebound Movement Likely

The rupee is expected to trade within the 86.10-86.60 band in the near term, with traders staying alert to any developments on the trade front. A breakthrough in negotiations could provide relief to exporters and support the rupee, while further delays may add pressure.

With mixed global cues and persistent domestic challenges, the rupee is likely to remain under close watch by market participants in the coming sessions.

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