Rupee Rises 21 Paise to 85.87 Against Dollar as Greenback Weakens

Mumbai, June 26 – The Indian rupee strengthened by 21 paise to 85.87 against the US dollar in early trade on Thursday, buoyed by a weakening greenback in global markets. However, gains were capped by rising global crude prices and sustained foreign institutional investor (FII) outflows.

Weak Dollar Boosts Rupee

At the interbank foreign exchange market, the rupee opened at 85.91 and climbed to 85.87, gaining 21 paise from Wednesday’s close of 86.08. The recovery comes after the rupee had slipped by 3 paise in the previous session due to strong dollar demand from oil companies and FPIs.

The US dollar index, which tracks the dollar’s performance against a basket of six major currencies, dropped 0.27% to 97.41, reversing gains from the previous session. The decline followed reports suggesting that US President Donald Trump may announce a successor to Federal Reserve Chair Jerome Powell earlier than anticipated, fueling expectations of rate cuts and undermining Powell’s authority.

Crude Oil Prices and FII Outflows Check Rupee Gains

Despite the rupee’s positive opening, upward pressure on global crude oil prices and continued equity market outflows weighed on sentiment.

Brent crude futures rose 1.30% to USD 68.01 per barrel, driven by a significant drawdown in US inventories and optimism around global demand. The ongoing truce between Iran and Israel has also reduced fears of supply disruptions in the Middle East.

On the investment front, FIIs remained net sellers in the domestic equity market, pulling out Rs 2,427.74 crore on Wednesday, as per exchange data.

Domestic Markets Trade Higher

Meanwhile, Indian equities maintained a positive tone. The BSE Sensex gained 163.27 points to reach 82,918.78 in early trade, while the NSE Nifty advanced 64.35 points to 25,309.10.

Market participants expect the rupee to trade in a range of 85.75 to 86.25 during the day, with currency movement closely tracking crude prices, FII flows, and global dollar trends.

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations