The Indian rupee opened 0.1% higher at 85.44 per U.S. dollar on Monday, showing a modest rebound from its previous close of 85.5050. This uptick comes after a week of volatility, with the rupee fluctuating between 84.62 and 85.72, reflecting ongoing global and domestic market uncertainties.
Key Highlights:
Early Gains: The rupee’s slight appreciation at the open signals renewed market optimism, even as traders remain cautious amid global currency swings and capital flow uncertainties.
Market Drivers: Analysts attribute the rupee’s movement to a mix of factors, including recent easing of domestic inflation, favorable global cues, and fluctuating crude oil prices. India’s retail inflation has dropped to a six-year low, boosting investor confidence and supporting the rupee’s resilience.
Dollar Demand: Despite the positive open, persistent demand for the U.S. dollar from importers and a recent wave of capital outflows by foreign and state-run banks have kept the rupee under pressure. The resistance level for the USD/INR pair is seen between 85.80 and 86.00, with traders eyeing this range for potential market moves.
Trade Talks & Geopolitics: Ongoing U.S.-India trade negotiations and the trajectory of the Chinese yuan remain key watchpoints. Any fresh developments on these fronts could spark further volatility in the rupee’s path.
Forecasts: The rupee is expected to trade in a narrow band, with today’s interbank rates forecasted between 85.59 and 85.60. While the currency has faced headwinds from global events, strong government finances and a narrowing current account deficit continue to provide underlying support.
As the trading week kicks off, all eyes are on the rupee’s ability to sustain its gains amid a complex web of global and domestic influences.
Sources: Reuters, BookMyForex, Lemonn
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