The Indian rupee strengthened significantly on Friday, surging 65 paise to 95.20 against the US dollar in early trade. This sharp appreciation comes as the dollar index, which measures the greenback's strength against a basket of six major currencies, traded lower at 99.75, down 0.11 per cent.
Market Sentiment Boosts Rupee
Forex traders attributed the rupee's rally to a combination of factors, including sustained foreign fund inflows and a weak dollar overseas. The domestic currency opened at 95.20 per dollar, compared to its previous close of 95.85.
Dollar Index Declines
The dollar index slipped 0.11 per cent to 99.75, reflecting broad weakness in the US currency. This decline provided a tailwind for emerging market currencies like the rupee.
Analysts noted that the rupee's movement will continue to be influenced by global cues, including crude oil prices and foreign investment flows. The Reserve Bank of India's intervention in the forex market also remains a key factor to watch.
The rupee's gain comes amid a positive trend in domestic equity markets, with benchmark indices trading higher in early deals. This further supported investor confidence in the Indian currency.
