The Indian rupee appreciated by 16 paise to settle at ₹85.39 per US dollar on Friday, buoyed by a weakening greenback, falling crude oil prices, and renewed optimism over global trade agreements.
At the interbank foreign exchange market, the rupee opened at ₹85.44 and traded within a narrow band, touching an intraday high of ₹85.30 and a low of ₹85.50 before closing at ₹85.39. The gain follows a 7-paise uptick on Thursday, signaling a mild recovery trend.
Forex analysts attributed the rupee’s strength to:
- A 0.24% decline in the US dollar index, which measures the greenback against six major currencies
- A 1.18% drop in Brent crude futures to $67.99 per barrel, easing concerns over India’s import bill
- Positive sentiment from US-Vietnam trade agreement, announced by President Donald Trump, which sparked hopes of further deals before the July 9 tariff deadline
The rupee’s rise coincided with gains in domestic equity markets. The BSE Sensex climbed 193.42 points to 83,432.89, while the NSE Nifty advanced 55.70 points to 25,461.00. Meanwhile, India’s services sector posted robust growth, with the HSBC India Services PMI rising to 60.4 in June, marking a ten-month high.
Despite the upbeat cues, Foreign Institutional Investors (FIIs) remained cautious, offloading equities worth ₹1,481.19 crore on Thursday. Domestic Institutional Investors (DIIs) provided partial support with net purchases of ₹1,333.06 crore.
Analysts expect the rupee to remain supported by global cues but caution that uncertainty over trade tariffs may cap further appreciation. The USDINR spot rate is projected to trade between ₹85.10 and ₹85.70 in the near term.
The currency’s resilience reflects a complex interplay of global market dynamics, domestic macroeconomic strength, and investor sentiment ahead of key geopolitical developments.
