Rupee hits five-day high at 94.35 as crude slump and weak Dollar drive rally
Indian equity markets mirrored the currency’s strength. The Nifty 50 rose 1.66 per cent to 24,357.3 and the Sensex gained 1.83 per cent to 78,719.72 as of 9:18 am IST, with indices opening near three-month highs.
The Indian rupee surged to a five-day high of 94.35 against the US dollar on Thursday, reflecting a 29-paise increase from Wednesday's close of 94.64. The currency's rise was driven by a combination of falling crude oil prices, a weaker dollar index, and renewed interest from foreign investors. Brent crude oil prices plummeted by 8.7 percent in the previous session, falling below $100 a barrel, and trading around $93.50 on Thursday, a further 1 percent decrease.
As India is one of the world's largest crude oil importers, lower energy prices are benefiting the country, alleviating pressure on the current account. The US midterm elections have emerged as a significant catalyst, with the Democratic Party's decisive victory boosting market expectations of President Trump facing pressure to negotiate a resolution to the US-Iran conflict, potentially easing oil price expectations.
Indian equity markets followed the currency's upward trend, with the Nifty 50 rising by 1.66 percent to 24,357.3 and the Sensex gaining 1.83 percent to 78,719.72, both as of 9:18 am IST. The indices had opened near three-month highs. The USD/INR pair was trading near 94.49, with immediate support at 94.00-94.10 and resistance at 94.90-95.00.
The dollar index hovered near a one-month low of around 101.5, suggesting a cautiously bearish near-term bias for the pair.
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