CHENNAI: The Indian rupee opened on a positive note, appreciating by 8 paise to ₹85.58 against the US dollar in early trade. This uptick was attributed to a positive opening in domestic equity markets and robust foreign capital inflows, reflecting investor confidence in the Indian economy.
Key factors influencing the rupee's movement
Domestic Equity Market Performance: The positive sentiment in Indian equities, with indices like the Nifty 50 and BSE Sensex showing gains, contributed to the rupee's strength.
Foreign Capital Inflows: Strong inflows of foreign capital into Indian markets provided support to the rupee, indicating investor confidence.
Global Currency Dynamics: Despite a firm US dollar globally, the rupee managed to appreciate, reflecting its relative strength among emerging market currencies.
Monetary Policy Considerations: Analysts noted that the Reserve Bank of India's recent rate cut has reduced forward premiums, potentially making the rupee more susceptible to depreciation.
Market Outlook
Analysts suggest that the rupee is likely to trade within a narrow range, with support around ₹85.40–₹85.50 and resistance near ₹86.50. The ongoing developments in US-China trade talks and global economic indicators will continue to influence the rupee's trajectory.