On Monday, the Indian rupee rose for the ninth straight day, boosted by a rebound in foreign inflows and reduced crude oil prices.
Bloomberg figures show that the domestic currency began 4 paise higher at 85.94 against the US dollar, up from 85.98 on Friday. The rupee is on course to achieve its biggest winning streak since January 2024. So far in March, the currency has appreciated by 1.83 percent, matching the dollar index's decline.
The currency has clearly broken below the 86.00 level, and it may challenge strong support at 85.80 in the immediate term, according to Amit Pabari, managing director at CR Forex Advisors. However, he noted that continued liquidity shortfalls and RBI measures to boost foreign reserves could cause a return to 86.50-86.60 levels. "
"Any uptick might present selling opportunities for traders, while a favourable shift in market conditions could propel the rupee towards the 85.50mark."
On Friday, foreign institutional investors continued to buy Indian equities worth ₹7,470 crore. Global funds have withdrawn ₹1.44 trillion from domestic markets this year.
"As we near the end of the month, quarter, and year, the dollar-rupee pair might see some demand as the RBI may wish to square up its holdings, according to Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. "The rupee, which has gained approximately 1.2 percent in the last week, is expected to consolidate before making the next move. The opening price today is about 85.95, with a range of 85.80 to 86.30."
The dollar index, which measures the value of the US dollar relative to a basket of foreign currencies, was up 0.02 percent to 104.109. The dollar index fell 3.26 percent in March, reaching its highest level since November 2022. Investors seeking protection amid economic uncertainty pushed treasury yields lower, limiting the dollar's rise, according to Pabari.
As traders evaluated the effects of the proposed reciprocal tariffs starting on April 2, crude oil prices slightly declined. As of 9:00 a.m. IST, WTI crude dropped 0.37 percent to 68.03 per barrel, while Brent crude dropped 0.39 percent to $71.88 per barrel. Meanwhile, global risk-on attitude increased following rumors that US President Donald Trump's tariff actions may be more targeted than previously threatened.
