Rupee rebounds from all-time low, gains 10 paise to close at 85.03 against US dollar

The  rupee staged a modest recovery on Friday, appreciating 10 paise to close at 85.03 against the US dollar. This comes after hitting an all-time low of 85.13 in the previous session. The recovery was driven by a softening US dollar index and a potential intervention by the Reserve Bank of India (RBI).

Intraday movements and key levels

At the interbank foreign exchange market, the rupee opened at 85.07 and traded within a narrow range of 84.95 to 85.12 during the session. It closed at 85.03, gaining marginally from the previous day's close.

Forex traders noted that while the rupee recovered from its lowest levels, it remains under pressure due to strong dollar demand and global uncertainties.

Factors supporting the recovery

The dollar index, which measures the greenback against a basket of six major currencies, slipped 0.14 per cent to 108.26, providing some relief to emerging market currencies, including the rupee. Additionally, Brent crude prices fell by 0.99 percent to USD 72.16 per barrel, easing concerns over India's import bill.

Traders also pointed to a potential RBI intervention that helped stabilize the currency in the latter half of the day.

Market outlook and challenges

Despite Friday's gains, the rupee is likely to face continued headwinds. Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said, "The rupee may trade with a negative bias due to weak domestic markets and overall dollar strength amid a hawkish Fed stance."

The Federal Reserve's recent 25 basis points rate cut was accompanied by a reduction in 2025 rate cut expectations from four to two, bolstering the dollar's strength.

Foreign Institutional Investors (FIIs) also remain net sellers in Indian markets, offloading Rs 4,224.92 crore worth of equities on Thursday.

Equity market performance

Domestic equity markets reflected investor caution, with the BSE Sensex dropping 1.49 per cent to 78,041.59 points and the NSE Nifty falling 1.42 per cent to 23,611.60 points.

The USD-INR pair is expected to trade within a range of 84.80 to 85.15 in the near term, with traders watching US economic data and crude price movements closely.

(With inputs from PTI)