Mumbai: The rupee appreciated 21 paise to 87.75 against the US dollar in early trade on Friday, supported by a softer American currency against major currencies and likely intervention by the Reserve Bank
of India.Forex traders said renewed foreign fund inflows and lower crude oil prices boosted investor sentiment further.
At the interbank foreign exchange market, the rupee opened at 87.91 and then gained ground and touched an early high of 87.75 against the US dollar, registering a gain of 21 paise from its previous close.
On Thursday, the rupee appreciated 12 paise to close at 87.96 against the US dollar, registering gains for the second straight session."After weeks of drifting in uncertain waters, the currency now seems to have found a favourable current -- buoyed by a softer US dollar, returning investor confidence, and the Reserve Bank’s steady hand at the helm," CR Forex Advisors MD – Amit Pabari said.
Pabari further noted that a break below 87.50 could open the way towards 86.80–87.00, hinting at more appreciation ahead. On the other side, 88.30–88.40 acts as a sturdy resistance zone.Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading lower by 0.16 per cent to 98.17.
Brent crude, the global oil benchmark, fell 0.26 per cent to USD 60.90 per barrel in futures trade.On the domestic equity market front, Sensex dropped 261.58 points to 83,206.08 in early trade, while the Nifty declined 76.7 points to 25,508.60.Foreign Institutional Investors (FIIs) purchased equities worth Rs 997.29 crore on Thursday, according to exchange data.
"After weeks of outflows, this return of foreign money is more than just a number — it signals renewed faith in India’s growth story and stability. When capital begins flowing back, currencies often follow the same direction," Pabari added.Meanwhile, Commerce and Industry Minister Piyush Goyal has said that India has implemented a number of free trade agreements with developed nations and is in active dialogue for such pacts with nations including the US, Oman, and the EU.
"We have done free trade agreements (FTAs) with many developed countries in the last three years...We are in active dialogue with the US, EU, Chile, Peru, New Zealand, and Oman," the minister told reporters here."It clearly shows that India is the favoured and preferred destination both for investment and for bilateral trade," he added.
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