The Indian rupee extended its winning streak to four days, as strong economic performance and renewed inflows into domestic equities boosted the currency.
According to Bloomberg data, the Indian rupee opened 19 paise higher at 85.49 against the US dollar, up from 85.68 on Wednesday. The currency has gained nearly ₹1.2 in the last four sessions, bringing the monthly decline against the dollar to 0.06 percent.
According to Amit Pabari, managing director at CR Forex Advisors, the rise in the rupee has been supported by positive domestic economic data and a global shift in sentiment following the US actions to slow China's growth. As a result, India is becoming a more appealing destination for foreign institutional investors, he claims.
On April 15, foreign institutional investors (FIIs) bought ₹6,065.78 crore in domestic equities, breaking a nine-day selling streak. This is the third-largest single-day buying this year. FIIs invested ₹3,936.4 crore in equities on Wednesday, marking their second consecutive day of buying.
Furthermore, India's real yields continue to be higher than those of major global economies, making Indian assets more appealing to foreign investors, Pabari stated. "This is expected to bring in more foreign money and provide further support to the rupee."
The dollar index, which measures the value of the US dollar relative to a basket of foreign currencies, was up 0.13 percent to 99.50, its lowest since April 2022. According to Pabari, the dollar index will likely fall to the 101.50-102 range in the short term as a result of the Federal Reserve's hawkish statements.
The rupee closed slightly stronger at 85.68 on Wednesday and was expected to trade between 85.40 and 85.80, according to Anil Kumar Bhansali, head of treasury and executive director of Finrex Treasury Advisors LLP. "Markets will keep a close watch on the Reserve Bank of India (RBI), which seems to be buying dollars to curb the rupee's rise."
Asian equity markets traded higher, despite Wall Street's overnight cues weighing on investor sentiment. Federal Reserve Chair Jerome Powell dampened expectations for a rate cut, stating that the central bank's priority is to keep tariff-driven price pressures from fueling sustained inflation.
Crude oil prices rose for a second day as the United States vowed to put maximum pressure on Iran's supply chain. Brent crude oil was up 0.93 percent to $66.46 per barrel, while WTI crude was up 1.14 percent to 63.18 per barrel as of 9:10 a.m IST.
