Indian Rupee: Range holds against US Dollar with oil support – Commerzbank

Mumbai witnessed the Indian rupee gaining strength as crude oil prices retreated, with the domestic currency climbing 12 paise to reach 94.72 against the US dollar. This rise was fueled by renewed investments from foreign institutional investors (FIIs) pouring into Indian equities, although a robust US dollar and election uncertainties placed constraints on the rupee's gains, according to forex traders.

The rupee commenced trading at 94.68 against the US dollar in the interbank foreign exchange market, reaching a peak of 94.60 intraday. By the end of the session, it traded at 94.72, marking a 12-paise gain from Monday's closing price of 94.84. In the previous day, the rupee slipped by 8 paise following a 50-paise gain in the earlier trading session.

Despite a dip in crude oil prices, the US dollar maintained its strength, limiting the rupee's upward movement. The dollar index edged up by 0.03 per cent to 101.65. Market analysts noted that the recent decline in oil prices was attributed to renewed talks between Iranian and Qatari officials. Lower oil prices generally bolster India's currency by easing the burden on the country's energy import expenses.

Foreign institutional investors further bolstered the rupee's strength on Monday by investing in Indian shares on a net basis, amounting to ₹3,114.68 crore. This renewed foreign investment bolstered domestic market sentiment. The Indian equity markets responded positively to these developments, with the BSE Sensex surging 551.77 points, or 0.73 per cent, to 76,244.55, and the NSE Nifty advancing 129.60 points, or 0.55 per cent, to 23,570.40.

Market participants will continue to observe crude oil trends, foreign investment flows, and global currency patterns for further guidance.