Rupee Opens Stronger Against US Dollar as Market Sentiment Improves

The Indian rupee started Thursday’s trading session on a positive note, extending its recent upward movement against the US dollar. Improved investor confidence in domestic financial markets and continued foreign investment helped the local currency register early gains despite global headwinds.

In the interbank foreign exchange market, the rupee opened at 95.59 before trading at 95.63 per US dollar, marking an improvement of 13 paise compared with the previous session’s closing level. The currency has now recorded gains over multiple trading sessions, reflecting steady support from market participants.

Currency dealers said robust buying in Indian equities by Foreign Institutional Investors has strengthened demand for the rupee. Exchange data showed that overseas investors purchased domestic equities worth Rs 2,981.87 crore on a net basis during Wednesday’s trading session, providing additional support to the currency.

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Even as the rupee advanced, its upward momentum remained restricted by the continued strength of the US dollar in global markets. The US Federal Reserve’s decision to leave interest rates unchanged helped the dollar maintain its position against major international currencies, making it difficult for emerging market currencies to post larger gains.

The dollar index, which measures the US currency against a basket of six major global currencies, edged higher to 101.79, reflecting sustained global demand for the greenback. Analysts noted that the stronger dollar offset part of the positive impact generated by domestic market factors.

Meanwhile, Brent crude futures traded around 89.60 dollars per barrel after declining by 1.26 percent. Energy markets remained volatile as geopolitical tensions resurfaced following renewed military developments involving the United States and Iran, reviving concerns over possible disruptions to global oil supplies.

Indian stock markets also traded in positive territory during the opening session. The Sensex gained 44.77 points to reach 77,699.37, while the Nifty advanced 21.65 points to 24,270.20, reflecting continued optimism among investors.

Market experts believe the rupee’s near term direction will largely depend on the movement of the US dollar, foreign investment flows, crude oil prices, and developments in global financial markets.