Rupee Opens Stronger at 85.15/$ against the US dollar

The Indian rupee began on a firmer note on Wednesday, getting support from weakening oil prices and consistent foreign inflows into equities, though tensions at the India-Pakistan border continue unabated.

The rupee appreciated by 10 paise to 85.15, after closing at 85.25 against the US dollar on Tuesday. The rupee had risen to a high of 84.96 in Monday's trading, its best closing since December 20, 2024.

The rupee's fall on Tuesday was due to fresh geopolitical tensions and increased demand for the US currency, which weighed on the local currency, said Amit Pabari, managing director at CR Forex Advisors. Market players are waiting with bated breath for the Cabinet Committee on Security (CCS) meeting at 11 AM, following Prime Minister Narendra Modi's order that gave the armed forces "complete operational freedom" in the wake of the April 22 Pahalgam terror attack.

Despite regional tensions, Pabari saw some encouraging trends. Foreign Institutional Investors (FIIs), lured by India's attractive real yields and strong corporate profits, have been net buyers in the market. FIIs bought stocks worth Rs 2,385.61 crore on Tuesday, taking their 10-day total to Rs 37,359 crore.

Meanwhile, in connected news, US President Donald Trump said on Tuesday that trade talks with India are going well and expected to seal a deal imminently. Also, US Treasury Secretary Scott Bessent told a banking conference that India may be the first nation to sign a trade pact with the United States, which further fueled optimism over the currency.

At 9:10 AM IST, the dollar index, which tracks the value of the US currency relative to a basket of foreign currencies, rose 0.05 percent to 99.28, though it is set for its worst month since November 2022.

Anil Kumar Bhansali, executive director and head of treasury at Finrex Treasury Advisors LLP, said the rupee is likely to open marginally stronger at 86.22 but is likely to remain volatile as news from the border situation emerges. He forecast a wide trading range of 84.90 to 85.60, with any rallies in the pair set to be sold off before tomorrow's holiday.

The prices of crude oil have also dipped, as trade policies under President Trump created uncertainty regarding decelerating global growth and lower fuel consumption. At 9:15 AM, Brent crude dropped 0.87 percent to $63.69 per barrel, and WTI crude declined 0.99 percent to $59.82 per barrel.