The Indian rupee settled 1 paisa higher at 94.15 against the US dollar on Monday, after opening at 94.25 at the interbank foreign exchange market. During the trading session, the domestic currency touched an intraday high of 94.11 and a low of 94.28 against the greenback.
The marginal appreciation was attributed to positive domestic equity markets and a slight weakness in the US dollar overseas. Traders also cited expectations of continued foreign fund inflows as supporting the rupee's sentiment.
Market Dynamics
The rupee's movement remained range-bound amid lack of major triggers. The dollar index, which gauges the greenback's strength against a basket of six major currencies, was trading marginally lower, providing some relief to emerging market currencies.
Meanwhile, domestic benchmark indices Sensex and Nifty traded in positive territory, reflecting investor confidence in the Indian economy. The Reserve Bank of India's (RBI) intervention through state-run banks to prevent sharp volatility also helped stabilize the rupee.
Outlook
Analysts expect the rupee to trade in a narrow range in the near term, with support at 94.50 and resistance at 93.80. Key factors to watch include global crude oil prices, foreign portfolio investment flows, and the RBI's monetary policy stance. The rupee has been under pressure in recent weeks due to geopolitical tensions and rising import bills, but Monday's close suggests some resilience.
