The Indian rupee appreciated by 25 paise to settle at 85.08 against the US dollar in early trade on Friday, April 25, supported by strong foreign fund inflows, optimism over a potential India-US trade agreement, and positive economic fundamentals.

Opening and Intraday Movements

At the interbank foreign exchange market, the rupee opened at 85.17, briefly touched a low of 85.19, and later strengthened to 85.08. The previous session on Thursday, April 24, had seen the rupee closing at 85.33, registering a gain of 12 paise.

Despite regional headwinds, the rupee showed resilience compared to most Asian currencies, which remained subdued amid global volatility.

Support from Foreign Inflows and Trade Talks

One of the key drivers of the rupee’s strength was the foreign institutional investor (FII) inflows, which remained robust. On April 24, foreign investors bought Indian equities worth ₹8,250.53 crore, further enhancing demand for the Indian currency.

Additionally, sentiments improved after US Treasury Secretary Scott Bessent hinted that India might be the first country to sign a bilateral trade agreement with the United States to circumvent Trump-era tariffs. This development sparked optimism across currency and equity markets.

Macro Fundamentals Boosting Confidence

Market participants highlighted India’s stable macroeconomic outlook, which provided a firm base for the rupee. The Reserve Bank of India’s (RBI) latest bulletin reaffirmed the economy’s resilience, driven by:

• Strong domestic growth

• Diverse global trade engagements

• Balanced fiscal and monetary policies

This positive economic narrative helped the rupee resist global headwinds that affected other regional peers.

Global Factors at Play

While local fundamentals supported the rupee, some external developments capped its upside. Key among them:

• Brent crude oil prices rose by 0.54% to $66.91 per barrel, increasing India’s import bill.

• The US Dollar Index climbed 0.38% to 99.75, indicating renewed dollar strength in global markets.

These factors contributed to a resistance zone for the rupee, especially near the 85.60 level.

Expert Commentary on Outlook

According to Amit Pabari, Managing Director of CR Forex Advisors, the rupee remains fundamentally strong, but short-term resistance may persist. He noted that the USD/INR pair is likely to trade within a range of 85.20 to 85.80, depending on:

• Crude price movements

• Dollar strength globally

• FII flows into Indian markets

This means any sharp appreciation of the rupee could be limited without additional positive cues.

Equity Market Snapshot

Despite the rupee’s gains, the Indian stock markets opened lower:

• BSE Sensex was down 73.22 points at 79,728.21

• NSE Nifty declined 32.85 points to 24,213.85

This was likely due to profit booking and cautious sentiment ahead of international economic data and global market cues.

Rupee Outlook in the Near Term

Looking ahead, the rupee’s performance will likely hinge on:

• Progress in India-US trade negotiations

• Continuity in foreign investment

• Global oil prices

• Dollar movement and US inflation data

Any positive developments in trade talks could open doors for further appreciation, while a rise in oil prices or dollar strength may reverse the rupee’s recent gains.

Conclusion

The rupee’s movement on April 25 underscores India’s growing appeal to global investors, driven by sound economic policies and strategic trade diplomacy. While short-term headwinds exist, the long-term outlook for the rupee remains optimistic, provided India maintains its macroeconomic stability and attracts sustained foreign investments.

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