Noida, July 3 (APAC Media): The rupee appreciated by 19 paise to 95.16 against the US dollar in early trade on Friday, supported by improved risk sentiment in domestic currency markets and a broadly softer dollar overseas, forex traders said.
At the interbank foreign exchange, the domestic unit opened on a firmer note compared to its previous closing level, tracking positive cues from Asian peers and mild weakness in the US dollar index.
Forex dealers said the rupee’s early gains were largely driven by easing demand for the greenback from importers and some foreign banks, coupled with a cautious improvement in investor sentiment across emerging markets.
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However, they noted that the appreciation remained limited as traders stayed on the sidelines ahead of key global economic data releases.
Market participants said the currency market continued to witness range-bound movement, with intermittent volatility driven by oil price fluctuations and expectations surrounding US Federal Reserve policy trajectory.
The dollar index, which measures the greenback’s strength against a basket of major currencies, remained slightly subdued, lending support to Asian currencies, including the rupee.
Despite the early uptick, analysts said sustained appreciation in the rupee is unlikely in the near term due to persistent dollar demand from importers and ongoing uncertainty over foreign portfolio investment flows.
Traders further added that crude oil prices, geopolitical developments, and global risk appetite will remain key drivers for the currency in the coming sessions.
Higher crude prices tend to weigh on the rupee as India is a major importer of oil.
Market watchers expect the rupee to trade with a volatile bias, with movements closely linked to global macroeconomic cues and domestic liquidity conditions.
–ENDS–
Disclaimer:Â Views expressed are those of experts and do not reflect APAC Media. This is for informational purposes only, not financial advice. We are not responsible for investment decisions. Please consult a qualified financial advisor before investing.
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