Indian Rupee Extends Recovery, Gains 17 Paise Against US Dollar
The Indian rupee continued its upward trajectory on Friday, appreciating by 17 paise to trade at 91.41 against the US dollar during early morning sessions. This positive movement follows a significant shift in global trade dynamics, with US President Donald Trump adopting a softer approach toward tariff threats against Europe concerning Greenland.
Geopolitical Easing Fuels Currency Recovery
Forex market analysts attributed this strengthening to reduced near-term geopolitical concerns following President Trump's moderated stance. The change in tone has alleviated fears of another potential trade war, creating a more favorable environment for emerging market currencies.
Improved risk appetite among international investors prompted a correction in the US dollar, allowing currencies like the Indian rupee to recover from recent pressures. The rupee opened at 91.45 in the interbank foreign exchange market before strengthening to 91.41, building on Thursday's rebound from record lows when it had gained 7 paise to close at 91.58.
Underlying Pressures and Market Sentiment
Despite this encouraging development, the Indian currency continues to face significant headwinds. Sustained foreign fund outflows amid ongoing global uncertainties are creating downward pressure on the rupee's valuation. Exchange data revealed that foreign institutional investors remained net sellers in the equity markets, offloading shares worth Rs 2,549.80 crore on Thursday alone.
Traders highlighted that the pending US trade agreement remains a crucial factor influencing the rupee's trajectory. They cautioned that until geopolitical risks diminish substantially and the trade deal materializes concretely, the Indian currency will likely remain vulnerable to external economic shocks and volatility.
Expert Analysis and Future Outlook
Amit Pabari, Managing Director of CR Forex Advisors, provided valuable insights in a research note regarding the rupee's prospects. "At current levels, a substantial portion of global risk appears to be priced into the rupee," Pabari observed. "This scenario opens the door for a phase of consolidation and a possible partial recovery if risk sentiment stabilizes in global markets."
Pabari further elaborated on technical levels, noting that the 92.00 mark remains a strong resistance point for the USD/INR pair. He suggested that with sustained intervention and support from the Reserve Bank of India, the currency pair could potentially move back toward the 90.50–90.70 range in the near term.
Broader Market Context
In global currency markets, the dollar index—which measures the US dollar against a basket of six major currencies—edged up marginally by 0.01% to 98.36. Meanwhile, in commodity markets, Brent crude futures, the international oil benchmark, rose by 0.87% to reach $64.62 per barrel, indicating improved energy market sentiment alongside currency movements.
The rupee's performance reflects the complex interplay between domestic economic factors and international developments, with traders closely monitoring both foreign investment flows and global trade negotiations for directional cues in the coming sessions.
