Rupee Rallies to Open at 85.61 Against US Dollar, Outperforms Peers on Foreign Inflows and Weaker Greenback

The Indian rupee opened 0.2% higher at 85.61 per US dollar on Tuesday, July 1, 2025, compared to the previous close of 85.7550. This marks the seventh consecutive session of gains for the rupee, which has now fully recouped its losses for the year and is outperforming most regional currencies.

 

Key Highlights:

 

Stronger Opening: The rupee’s firm start at 85.61 was supported by robust foreign fund inflows, a positive trend in domestic equities, and continued weakness in the US dollar, which has been under pressure from sell-offs in US stocks and bonds.

 

Market Sentiment: The rupee’s appreciation comes despite recent volatility triggered by global trade tensions and reciprocal tariff threats. The local currency has rallied over 2% this month, buoyed by easing inflation and optimism over India’s economic outlook.

 

Intraday Moves: During the session, the rupee touched a high of 85.49 and a low of 86.01, reflecting active trading and some volatility as traders responded to global cues and local demand-supply dynamics.

 

Yearly Recovery: The rupee has now erased all its losses from earlier in 2025, recovering from a record low of 87.59 hit last month. Analysts attribute the turnaround to exporters and foreign banks selling dollars for quarter-end adjustments, while state-run banks have stayed on the sidelines.

 

Risks Ahead: Despite the current strength, analysts caution that liquidity constraints, global crude price movements, and ongoing trade policy uncertainties could continue to influence the rupee’s trajectory in the coming weeks.

 

Sources: Financial Express, Moneycontrol, Deccan Herald