Rupee Rebounds as Dollar Dips Amidst Trade Tensions

The Indian rupee gained 12 paise against the US dollar, closing at 85.33 due to a weaker dollar, lower crude oil prices, and FII inflows. Despite global tensions following the Pahalgam terror attack, analysts suggest a positive bias for the rupee, predicting it to trade within 85 to 85.70.

After a short-lived pause, the rupee made a comeback, gaining 12 paise against the US dollar to close at 85.33 on Thursday. Key factors contributing to this uptick were a weaker dollar, a decline in crude oil prices overnight, and substantial foreign institutional investor (FII) inflows.

Forex traders highlighted that the rupee's strength was primarily driven by the dollar's weakness and a drop in crude oil prices amidst the slowing business activity in the US. The currency opened at 85.60 at the interbank foreign exchange, fluctuating between an intra-day high of 85.25 and a low of 85.67.

Meanwhile, geopolitical tensions following the Pahalgam terror attack put a strain on market sentiments, prompting India to downgrade diplomatic ties with Pakistan. However, analysts remain optimistic about the rupee's trajectory, forecasting a positive bias amid ongoing trade tariff uncertainties and potentially supportive FII inflows.

(With inputs from agencies.)