MUMBAI: The Indian rupee bounced back from record lows on Friday, closing 7 paise higher at 88.28 (provisional) against the US dollar, supported by a weaker US dollar index and positive domestic market sentiment.
Forex traders noted that the rupee traded within a narrow range, remaining close to its all-time low as tariff-related pressures on India’s exports and sustained foreign fund outflows weighed on investor confidence.
At the interbank foreign exchange, the rupee opened at 88.39 and hit an intraday low of 88.42 before recovering to close at 88.28. On Thursday, the currency had fallen 24 paise, closing at a record low of 88.35 and touching an intraday low of 88.49.
Anuj Choudhary, Research Analyst, Currency and Commodities at Mirae Asset ShareKhan, said, “The rupee is likely to trade with a slight positive bias amid overall weakness in the US dollar and improved risk appetite in global markets, as markets price in a potential Fed rate cut at next week’s FOMC meeting.”
Choudhary added that while markets anticipate a 75 bps rate cut in 2025, foreign fund outflows and uncertainties over India-US trade tariffs could limit sharp gains. He expects the USD-INR spot to trade between 88 and 88.50.
The dollar index, which measures the greenback against a basket of six currencies, rose 0.22% to 97.74. Meanwhile, Brent crude futures gained 0.65% to USD 66.80 per barrel.
On the domestic equity front, the Sensex surged 355.97 points to 81,904.70, and the Nifty added 108.50 points to 25,114. However, Foreign Institutional Investors (FIIs) sold equities worth Rs 3,472.37 crore on Thursday.
On the trade front, Commerce and Industry Minister Piyush Goyal said negotiations between India and the US on a proposed trade agreement, launched in March, are progressing positively, with both countries satisfied with developments. His remarks followed former US President Trump’s statement that there would be “no difficulty” in reaching a successful conclusion, and he looks forward to speaking with his “very good friend” Prime Minister Narendra Modi in the coming weeks.
