Rupee Stages A Strong Comeback Against The US Dollar, Jumps 24 Paise To 93.74 As Crude Slips Below $100 And Middle East Peace Hopes Rise

Mumbai: The Indian rupee strengthened by 24 paise to 93.74 against the US dollar in early trade on Monday, supported by falling crude oil prices, renewed foreign investment inflows and hopes of easing geopolitical tensions in the Middle East.

The domestic currency opened at 93.85 in the interbank foreign exchange market before appreciating to 93.74 against the greenback. The rupee had closed at 93.98 on Friday, gaining 43 paise during the previous session.

Crude Relief

Lower global crude oil prices provided support to the Indian currency as diplomatic developments raised expectations of reduced tensions between the United States and Iran. US President Donald Trump indicated that further military strikes against Iran were unlikely if negotiations progressed towards a meaningful agreement. Brent crude futures declined 0.15% to $98.17 per barrel, considerably below the earlier level of $117.64.

Forex Outlook

Amit Pabari, Managing Director of CR Forex Advisors, said improving diplomatic expectations were already influencing energy markets. He indicated that the rupee's movement below 94 against the dollar had strengthened prospects of further appreciation. According to Pabari, the currency could move towards 93.50 and subsequently 93.00. However, the 94.40–94.50 range could act as immediate resistance for the rupee.

Foreign Inflows

Strong foreign institutional investor buying also supported domestic currency sentiment. FIIs purchased Indian equities worth ₹13,749.82 crore on Friday, according to exchange data. Meanwhile, the dollar index declined 0.12% to 102.18, reflecting weakness in the American currency against major global currencies.

Forex Reserves

India's foreign exchange reserves declined by $2.691 billion to $717.056 billion during the week ended October 30, according to Reserve Bank of India data.

Market Movement

Domestic equity benchmarks traded lower during early dealings. The Sensex slipped 93.95 points to 80,919.19, while the Nifty declined 30 points to 24,968.80.