Mumbai: The rupee staged a strong recovery of 88 paise from its record closing low to open at 87.93 against the US dollar in early trade on Wednesday, buoyed by a softer dollar index and expectations of more rate cuts by the US Federal Reserve later this year.
Forex traders attributed the rupee’s rebound to falling crude oil prices and possible intervention by the Reserve Bank of India (RBI) to stabilise the domestic currency.
At the interbank foreign exchange market, the rupee opened at 88.74 per dollar, strengthened sharply, and touched 87.93, marking a gain of 88 paise from Tuesday’s closing level of 88.81 — its all-time low. It was last seen trading at 88.33 against the greenback.
US Federal Reserve Chair Jerome Powell, in his remarks on Tuesday, hinted at further rate cuts this year amid rising unemployment. He also warned of risks from sticky inflation, tariffs, and tight immigration policies, said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Meanwhile, the dollar index — which measures the US currency against a basket of six major peers — slipped 0.20% to 98.85.
“The index eased to around 99.03, down about 0.24% from the previous session, as concerns over US-China trade tensions and the prolonged US government shutdown dampened investor sentiment,” Bhansali added.
On the commodities front, Brent crude futures were down 0.43% at USD 62.12 per barrel, pressured by the ongoing US government shutdown, now stretching into its third week.
In domestic equities, Sensex jumped 354.57 points to 82,384.55, while Nifty gained 109.55 points to 25,255.05 in early trade.
However, Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth Rs 1,508.53 crore on Tuesday, as per exchange data.
