Rupee’s 5-day winning streak ends with the currency closing at ₹93.93

The Indian rupee ended a five-day winning streak on Monday, closing slightly weaker at ₹93.93 per US dollar (USD), according to the source. State-run banks had purchased dollars as directed by the Reserve Bank of India (RBI) amid relatively low trading volumes. The rupee's intraday range fluctuated between ₹93.69 and ₹94.11. Dilip Parmar, a Senior Research Analyst at HDFC Securities, explained that the rupee experienced a technical retracement, breaking a five-day winning streak due to state-run bank dollar purchases ahead of a market holiday.

The intraday decline followed morning gains sparked by a soft dollar index, resilient foreign institutional inflows, and lower crude oil prices. Parmar noted that market participants are closely watching Tuesday's release of US inflation data for fresh directional cues. In the short term, USDINR is expected to find support around ₹93.50 and resistance near ₹94.30.

Amit Pabari, MD of CR Forex Advisors, observed that improved prospects for peace in West Asia could reduce the risk premium in crude oil, providing additional support to the rupee. He added that fresh foreign capital inflows, through equity investments, would also bolster the Indian currency. Pabari expressed a positive outlook for the rupee, citing lower crude prices, improving foreign flows, and the hope of resolving conflicts in West Asia.

With USD/INR breaking below the 94.00 level, the likelihood of further rupee appreciation towards 93.50 and 93.00 has increased. Madan Sabnavis, Chief Economist at Bank of Baroda, emphasized that lower crude prices benefit the trade balance and currency, which is why the rupee is likely to appreciate in the coming days. As long as oil prices remain low, the rupee will gain, regardless of dollar strength in the near term.