Rupee rises 5 paise to close at 86.55 against U.S. dollar

The rupee appreciated 5 paise to close at 86.55 (provisional) against the U.S. dollar on Monday (January 20, 2025), as an overnight decline in crude oil prices and the U.S. dollar index supported investor sentiments.

Besides, a positive trend in domestic equities also helped the local currency, Forex traders said the rupee is likely to trade within a volatile range of 86.20-86.80 ahead of key events in the global and domestic economic landscape.

At the interbank foreign exchange, the rupee opened on a strong note at 86.48 against the greenback. During the day, the local unit touched an intraday high of 86.46 and a low of 86.57.

It finally closed at 86.55 (provisional), a rise of 5 paise against the U.S. dollar.

In the previous session on Friday (January 17, 2025), the rupee settled at 86.60.

According to Anuj Choudhary – Research Analyst at Mirae Asset Sharekhan, the rupee strengthened against the greenback on the weak tone in the U.S. Dollar index and positive domestic markets. Overnight decline in crude oil prices also supported the rupee.

“We expect the rupee to remain weak on underlying strength in the U.S. Dollar and importer demand for Dollars. However, any further correction in crude oil prices and extended gains in the domestic markets may support the rupee at lower levels,” Mr. Choudhary said.

The U.S. markets will remain closed due to the Martin Luther King Junior Day holiday.

USD/INR spot price is expected to trade in a range of 86.40 to 86.75.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading down 0.17% to 109.16.

Brent crude, the global oil benchmark, fell 0.50% to $80.39 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex rose 454.11 points, or 0.59%, to settle at 77,073.44 points, while the Nifty rose 141.55 points, or 0.61%, to 23,344.75 points.

Foreign Institutional Investors (FIIs) remained net sellers in the capital markets on Friday (January 17, 2025), as they offloaded shares worth ₹3,318.06 crore, according to exchange data.

On the domestic macroeconomic front, India’s forex reserves dropped by $8.714 billion to $625.871 billion in the week ended January 10, the Reserve Bank of India (RBI) said on Friday (January 17, 2025).

Earlier, the overall kitty dropped by $5.693 billion to $634.585 billion in the week ended January 3, the RBI said.