Indian Rupee Edges Higher, Trades at 90.40 in Early Session
Currency edges higher in early trade as investors await clarity on India-US trade pact and RBI policy outcome
India, Feb 05 : The Indian rupee moved within a tight band on Thursday morning, appreciating 7 paise to trade at 90.40 against the US dollar, supported by cautious optimism in the currency market despite ongoing corporate demand for dollars.
Market participants are closely watching developments around the proposed India-US trade agreement, as the absence of officially released documents has prompted investors to seek confirmation before strengthening bullish bets. Attention is also firmly on the Reserve Bank of India’s monetary policy decision scheduled for Friday, which is expected to offer guidance on the interest rate trajectory.
The domestic currency opened at 90.52 in the interbank foreign exchange market, strengthened to 90.40, and briefly touched 90.53 during initial deals. In the previous session, the rupee had weakened by 15 paise to settle at 90.47.
According to Amit Pabari, Managing Director at CR Forex Advisors, traders are waiting for greater clarity on the trade agreement before pushing the rupee higher. He noted that consensus expectations suggest the RBI will likely maintain the current rate stance, with potential cuts seen as unlikely in the near term.
Globally, the dollar index which measures the greenback against a basket of major currencies rose 0.18 per cent to 97.79. Meanwhile, Brent crude futures slipped about 2 per cent to USD 68.07 per barrel, offering some relief to import dependent economies.
Technical indicators suggest the 89.80–90.00 range has formed a strong support zone, increasing the possibility of the rupee moving toward the 90.80–91.20 band if momentum sustains. Analysts added that the central bank’s policy cues and confirmation of the trade deal will remain critical drivers for the currency.
In domestic equities, benchmark indices opened lower, with the Sensex falling 278.72 points to 83,538.97 and the Nifty declining 94.15 points to 25,681.85. Exchange data showed foreign institutional investors were marginal net buyers on Wednesday, purchasing shares worth Rs 29.79 crore.
