Rupee reaches two-week high as oil prices decline
The Indian currency gained 0.2 per cent as easing energy costs and foreign inflows into domestic stocks supported market sentiment.
The Indian rupee ended at its strongest level in two weeks on Thursday, gaining 0.2 per cent to close at 94.4750 against the US dollar, according to the Economic Times.
The currency's rise followed a decline in oil prices to below $100 per barrel. This drop occurred as investor concerns regarding the Iran war eased after Republicans lost control of the US Congress.
Indian stocks saw their best performance in 7 months while bond yields fell to their lowest level in over a month. These movements reflected reduced anxiety over how high energy prices might impact India, the world's third-largest oil importer.
Traders are monitoring foreign inflows into Indian equities to determine the rupee's future direction. Provisional data showed foreign investors net bought stocks worth $769.65 million on Wednesday, bringing the monthly total to $1.57 billion.
Analysts at DBS noted that the sustainability of the current relief rally will depend on US policy outlooks, including decisions on the West Asia crisis, fiscal dynamics, and AI investment policies.
A trader at a Singapore-based hedge fund said that sustained improvements in flows could allow the central bank to let existing dollar sales in the non-deliverable forward market mature without increasing pressure on the rupee.
