Rama Krishna Sangem
Indian rupee is getting stronger, against the US dollar. Indian Rupee gained after three straight days of decline as the revival in the US dollar proved short-lived with the federal appeals court temporarily reinstating US President Donald Trump’s tariffs.
The domestic currency opened 16 paise stronger at 85.36 against the US dollar, after ending at 85.52 on Thursday, according to Bloomberg. However, the currency is on course to end the month with a depreciation of 0.9 per cent.
On May 29 Thursday, the US Court of Appeals granted the Trump administration’s request to temporarily pause the trade court’s ruling to block ‘liberation day’ tariffs. Further, the higher-than-expected rise in the jobless numbers in the US also pressured the greenback, along with a 0.2 per cent decline in the March quarter economic growth.
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.14 per cent at 99.43. With See-saw tariff policies continuing to keep investors on edge, the dollar index has fallen 8 per cent this year. The greenback is heading for its fifth straight monthly loss as traders braced for further bouts of uncertainty around trade and fiscal health, experts said.
Oil at $ 63.84 barrel
The rupee is expected to open slightly stronger at 85.32, supported by daily flows, as the market reacts to weakening US jobless claims, which have started to show cracks, pulling down the US 10-year yield, Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. “We continue with the recommendation to sell dollars near 85.70/75 whenever we get the level, while we buy dollars on a cash basis.
India’s gross domestic product (GDP) data for the final quarter of the previous financial year will be the key data to watch. The dollar-rupee pair remains in a consolidation zone with resistance near 85.70-85.90 levels and strong support of 84.90-85.10 levels, according to Amit Pabari, managing director at CR Forex Advisors. “A breach on either side could pave a sharp movement in that direction.”
In commodities, crude oil prices fell after a day of advance after an appeals court temporarily reinstated tariffs. Brent crude price was down 0.48 per cent to $63.84 per barrel, while WTI crude prices were 0.48 per cent lower at 60.65, as of 9:15 AM IST.
The robust economic growth and prospects of India withstanding Trump’s tariffs is likely to ensure a strong rally at stock markets and further strengthening of rupee in the coming days.
