Rupee Rebounds: Factors Driving the Currency Market

The rupee appreciated by 16 paise against the US dollar, reaching 85.29, influenced by a weaker dollar and a decline in crude oil prices. Market sentiment was affected by geopolitical tensions from a terror attack in Jammu & Kashmir. Meanwhile, foreign institutional investors showed optimism by buying equities.

The Indian rupee staged a recovery, gaining 16 paise to 85.29 against the US dollar on Thursday after a two-day slump. The currency's rebound was fueled by a weaker greenback and decreasing crude oil prices, according to forex traders.

The rupee's performance was further bolstered by a decline in US Treasury yields, with the 10-year yield dropping by 3 basis points to 4.35 percent. This movement marked a positive shift from Wednesday's depreciation of 26 paise.

Tensions following a terror incident in Jammu & Kashmir also played a role in shifting market dynamics. Prime Minister Narendra Modi pledged a strong response to the attack, impacting geopolitical factors in market sentiment.

(With inputs from agencies.)