The Indian rupee surged in early Friday trading, strengthening by 51 paise to 86.17 against the U.S. dollar, buoyed by a combination of bullish domestic equities, a weakening dollar, and a decline in global crude oil prices.
At the interbank foreign exchange market, the rupee opened at 86.22 — 46 paise stronger than its previous close of 86.68 on Wednesday. Markets were shut on Thursday in observance of Mahavir Jayanti. The local currency extended its early gains to reach an intraday high of 86.17 against the dollar.
The rally comes in the wake of U.S. President Donald Trump’s announcement to suspend an additional 26% tariff on Indian exports until July 9, a move seen by markets as a significant de-escalation of trade tensions between the two nations.
“The rupee is poised to remain strong, potentially breaching the 86 mark,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. “With the dollar index falling below its September low of 100.20, we could see further downside toward the 95 level.”
Bhansali noted that exporters have been capitalizing on the rupee’s strength by hedging their currency exposure. “Any rebound driven by global risk aversion should be viewed as an opportunity to further cover,” he added, projecting an intraday trading range between 86.00 and 86.60.
The U.S. dollar index — which measures the greenback’s strength against a basket of six major currencies — dropped 0.81% to 100.04, its lowest level since September. The decline reflects diminishing investor confidence in the U.S. economic outlook, prompting a shift toward traditional safe havens, including the Swiss franc, Japanese yen, euro, and gold.
The dollar’s fall has been particularly sharp against the Swiss franc, which soared to its highest level in decades, as investors seek stability amid mounting global uncertainties.
With improved risk sentiment in local markets and supportive global cues, currency traders will be closely monitoring whether the rupee can maintain momentum and break decisively below the 86 threshold in the sessions ahead.
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