In a noteworthy development this Thursday, the Indian Rupee displayed encouraging strength, recovering 15 paise to trade at 88.60 against the U.S. dollar in early morning transactions. This positive movement comes on the heels of the American currency showing some weakness in international markets.
Currency experts and forex traders have been closely watching the Rupee, noting that it has been under considerable strain throughout the week due to a convergence of several challenging factors.
Key pressures impacting the Rupee include recent hikes in H-1B visa fees, the implementation of new tariffs by the Trump administration, and a consistent outflow of funds from foreign investors. These elements collectively dampened market sentiment.
During the interbank foreign exchange session, the Rupee commenced trading at 88.65 to the U.S. dollar. It then firmed up to 88.60, marking a gain of 15 paise compared to its previous closing rate.
Just the day before, on Wednesday, the Rupee had concluded trading at an unprecedented low of 88.75 against the U.S. dollar, dropping by 2 paise.
Forex traders highlighted persistent anxieties among investors regarding broad global trade uncertainties and the potential adverse effects of increased U.S. visa fees on India’s vital IT services export sector.
Concurrently, the dollar index, a measure of the U.S. dollar’s value against six major world currencies, was observed trading marginally lower by 0.13% at 97.75.
In the commodities market, Brent crude, an international benchmark for oil prices, saw a slight dip of 0.36%, settling at $69.06 per barrel in futures trading.
Domestically, the equity market opened softer, with the Sensex falling 141.32 points to 81,574.31, and the Nifty registering a drop of 22.4 points to 25,034.50.
Exchange data also revealed that Foreign Institutional Investors (FIIs) continued their selling streak, offloading equities valued at ₹2,425.75 crore on Wednesday.
Commenting on the situation, Amit Pabari, MD of CR Forex Advisors, stated, “The USD/INR pair is currently challenging crucial levels, with resistance anticipated between 89.00 and 89.20, and support holding at 88.40. This upward movement appears primarily influenced by tariffs and visa fee increases, rather than a generalized strengthening of the dollar. A definitive close below 88.20 would signal the initial indication of a potential trend reversal for the Rupee. Furthermore, any positive advancements in trade discussions or a weakening dollar index could provide additional impetus for the Rupee’s recovery.”