Rupee Climbs to Three-Week High at 95.67, Extends Four-Day Rally as RBI Intervention Supports Currency

The Indian rupee surged for the fourth consecutive trading session on Friday, opening 29 paise higher against the US dollar and climbing to a near three-week high. The USD INR pair is at 95.5460, up 0.04% from the previous session.

As per data from Trading Economics, "The domestic currency was trading around 95.67 per US dollar in early trade, extending its recent recovery after gaining more than 1% from its recent lows."

The main reason behind the rebound in the currency is that the RBI has reportedly been selling US dollars in the foreign exchange market every trading day since last Friday to prevent the currency from weakening to record lows.

According to traders, the central bank's consistent presence in the market has helped improve sentiment and provided stability to the rupee amid global uncertainty.

Earlier in the month, the rupee had slid to around 96.58, near record lows, as crude surged past $100 per barrel after the Houthi attacks on Saudi tankers in the Red Sea, plus fresh US tariffs of 10-12.5% on around 60 economies, which included a 10% duty on Indian goods. For the currency, July's worst level was 96.8752 on the 23rd.

However, the rupee's upside was capped after the US Federal Reserve kept interest rates unchanged. Because of this decision, the US 30-year Treasury yield was pushed close to its highest level in nearly two decades, which provided strength to the dollar globally.

As per a report by Finrex, "Although the US Dollar Index weakened to around 100.80, the rupee was unable to benefit significantly as higher oil prices and domestic dollar demand outweighed the positive impact of a softer dollar. As oil prices fell to $ 85.75 per barrel and the dollar index was lower at 100.17, the rupee is set to open at 95.42 levels this morning."

"The range for the currency is expected between 95.20 to 95.75 for the day. Exporters need to sell the upticks that they get intraday towards 95.65-75 while importers can keep buying the dips towards 95.20," the report further added.

Market opens Higher On Friday

Both the benchmark indices opened positively on Friday, with the Sensex & Nifty trading higher in the early trade.

At around 10 AM, the BSE Sensex rose 35.55 points or 0.04% to 77,962. Meanwhile, the Nifty 50 surged 34 points to 24,351 at the time of writing.

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