The rupee opened stronger at 87.14 and climbed to a high of 87.03 against the Dollar in early trade on Thursday, marking a sharp appreciation of 19 paise from its previous close. The domestic currency gained support from favourable macroeconomic data, which also spurred buying interest in equity markets.
Forex analysts noted that while global tariff tensions continued to drive foreign capital outflows, a weaker Dollar index and lower crude oil prices bolstered the rupee’s strength.
On Wednesday, the rupee had settled marginally lower by 1 paise at 87.22 per Dollar, after recovering 10 paise on Tuesday, following a steep 36-paise loss on Monday.
The Dollar index, which measures the greenback’s strength against six major currencies, edged 0.01 per cent lower to 103.57. Brent crude prices also dipped 0.01 per cent to trade at $70.90 per barrel in futures.
Meanwhile, the domestic equity market remained positive, with the BSE Sensex gaining 23.47 points to 74,053.23 and the Nifty rising 16.95 points to 22,487.45. However, foreign institutional investors (FIIs) were net sellers, offloading equities worth Rs 1,627.61 crore on Wednesday, exchange data showed.
On the economic front, easing prices of vegetables, eggs, and protein-rich food items have created room for the Reserve Bank of India (RBI) to consider another interest rate cut next month. Additionally, data from the National Statistics Office (NSO) revealed that India’s Index of Industrial Production (IIP) grew 5 per cent in January 2025, supported by a rebound in manufacturing activity.
Globally, US President Donald Trump escalated trade tensions by imposing a 25 per cent tariff on steel and aluminum imports, citing the need to reclaim wealth “stolen” by other nations. In response, Canada announced reciprocal 25 per cent tariffs on steel products and additional taxes on items such as textiles, electronics, and food products, including beef and bourbon. The European Union (EU) also retaliated with higher tariffs on American beef, poultry, bourbon, motorcycles, peanut butter, and jeans.
