Rupee rises 24 paise to 93.74 against US dollar in early trade

On Monday, the Indian rupee strengthened by 24 paise to 93.74 against the US dollar in the initial trading session, buoyed by reduced crude oil prices, growing foreign investments, and optimism surrounding a potential de-escalation in West Asia. Forex traders forecasted a positive outlook for the rupee, as progress towards peace in the region would lower the risk premium on crude oil and further bolster the currency.

The rupee opened at approximately 93.85 in the interbank foreign exchange market, ultimately rising to 93.74, a 24-paise increase from the previous day's closing level. On Friday, the rupee surged 43 paise to close at 93.98 against the US dollar. Positive diplomatic expectations are already influencing energy markets, with Brent crude oil, previously around $117.64, now trading below $100 and nearing $98.

Amit Pabari, MD of CR Forex Advisors, emphasized that even the prospect of a lasting agreement is crucial for currency markets. Meanwhile, the dollar index, tracking the greenback's strength against six currencies, fell by 0.12 percent to 102.18. Brent crude, the global oil benchmark, declined by 0.15 percent to $98.17 per barrel.

Foreign institutional investors (FIIs) invested ₹13,749.82 crore in equities on Friday, as per exchange data. On Monday, the Sensex declined by 93.95 points to 80,919.19, while the Nifty fell by 30 points to 24,968.80. With USD/INR crossing the 94.00 mark, the likelihood of a further rupee appreciation towards 93.50 and 93.00 has heightened.

The immediate resistance level is expected to be 94.40–94.50, according to Pabari. India's forex reserves decreased by $2.691 billion to $717.056 billion during the week ended October 30, as reported by the RBI on Friday.