Rupee appreciates 10 paise to 84.31 amid upbeat equity markets and geopolitical optimism

The Indian rupee gained 10 paise to close at 84.31 against the US dollar on Monday, buoyed by strong domestic equities and improved global risk sentiment.

Key drivers

• Equity market surge: A sharp rally in the Sensex and Nifty bolstered investor confidence, supporting the rupee.

• Geopolitical stability: Reports of a potential ceasefire deal between Israel and Hezbollah eased geopolitical tensions, further aiding sentiment.

• US bond yields: The appointment of Scott Bessent as US Treasury Secretary led to optimism about fiscal prudence, weighing on dollar yields and benefiting emerging market currencies like the rupee.

Trading highlights

At the interbank forex market, the rupee traded in a narrow range, hitting an intraday high of 84.25 before closing at 84.31. On Friday, it had closed at 84.41, recovering from record lows.

Analyst view

“The USD-INR pair may remain range-bound in the near term, with support at Rs 84.25 and resistance around Rs 84.52,” noted Praveen Singh of Sharekhan by BNP Paribas.

Global context

• The dollar index dipped 0.47 per cent to 107.05, reflecting a weaker greenback.

• Brent crude fell 0.69 per cent to $74.65 per barrel, providing additional relief to the rupee.

Reserve dynamics

India’s forex reserves fell by $17.76 billion to $657.89 billion for the week ended November 15, continuing a declining trend, as per RBI data.

Market outlook

With geopolitical concerns easing and stable equity markets, the rupee could hold steady, though broader risks remain from external factors like global growth and oil price volatility.