Rupee Strengthens 28 Paise On India-US Trade Discussions
The rupee movement was also underpinned by a softer dollar ahead of the Federal Reserve’s policy decision where the markets are largely positioned for a 25-basis point rate cut: Reports
MUMBAI: The Indian rupee continued to appreciate for the fourth consecutive day to close 28 paise stronger (one month high) against the greenback at 87.81 level on improving sentiment from constructive India-US trade discussions, improved inflows in capital markets and stable oil prices.
At the interbank foreign exchange market, the rupee opened at 87.84 against the US dollar, then touched 87.81, registering a gain of 28 paise from its previous close. On Tuesday, the rupee had appreciated 7 paise to close at 88.09 against the US dollar.
The rupee movement was also underpinned by a softer dollar ahead of the Federal Reserve’s policy decision where the markets are largely positioned for a 25-basis point rate cut. The moderation in US treasury yields and the decline in the dollar index created a supportive backdrop for emerging market currencies with the rupee particularly well-placed to benefit given the forward-looking nature of the recent trade dialogue.
Nandish Shah - Deputy Vice President, HDFC Securities said, “The rupee's strength is largely a reflection of a more positive outlook on US-India trade relations and the ongoing unwinding of long positions in the USD-INR, a trend supported by the greenback's weakness and the
strength in domestic equity markets.”
“While the near-term bias for the rupee is tilted towards further appreciation, we caution that any hawkish tilt from the Fed or adverse developments on the trade policy front could temper gains and
introduce volatility,” said Abhishek Goenka, founder and chief executive officer of IFA Global.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 96.73, higher by 0.11 per cent. Brent crude, the global oil benchmark, was trading 0.20 per cent lower at $68.33 per barrel in futures trade.
