The Indian rupee appreciated to 82.30 against the US dollar on Tuesday, its strongest level in six months, supported by a weak greenback, strong FII inflows, and positive domestic market sentiment ahead of the RBI policy decision.
Currency Movement
Key currency pair movements for the day:
- USD/INR: 82.30 (-0.35%)
- EUR/INR: 89.50 (-0.28%)
- GBP/INR: 104.80 (-0.40%)
- JPY/INR: 0.55 (-0.38%)
Supporting Factors
Multiple factors contributed to the rupee’s strength. FII inflows of Rs. 3,200 crore in equities and Rs. 1,500 crore in debt provided strong support.
Dollar Index Weakness
The Dollar Index continued its downward trajectory, falling to 102.50. Fed rate cut expectations and softer US economic data weighed on the greenback.
RBI Intervention
The RBI is believed to have accumulated dollars at lower levels, building reserves while allowing the rupee to reflect market dynamics.
Trade Balance Impact
The stronger rupee is expected to benefit import-intensive sectors while potentially impacting export competitiveness in certain industries.
Corporate Hedging
Treasury teams at major corporates are reassessing their hedging strategies amid the rupee’s appreciation trend.
Technical Outlook
Technical analysts see crucial support for USD/INR at 82.00. A break below this level could trigger further weakness toward 81.50. Resistance is seen at 82.80.
