The Indian rupee surged to a seven-month high in the opening session on Monday, November 9, appreciating 22 paise against the US dollar amid early buying in the domestic currency. At the interbank foreign
exchange market, the rupee was trading at 93.70 against the US dollar in the opening session, compared with its previous close of 93.98.
Market participants will track movements in crude oil prices, foreign institutional investor flows, the dollar index and developments in global markets for further cues on the domestic currency.
The currency surged more than 1% last week, buoyed by a sizeable pick-up in foreign inflows into Indian equities and a decline in oil prices.
Foreign investors poured more than $4 billion into Indian equities last week. South Korea and Taiwan, two markets that have benefited significantly from the AI trade, slumped last week, prompting foreign outflows.
A selloff in technology shares across the US and Asia after the Democratic Party sweep in the US midterm elections on Wednesday stoked concerns that it could impact sector growth.
A nearly 20% plunge in Brent crude prices last week provided an additional reason for foreign investors to favour Indian assets.
For the rupee, capital flows and oil prices have been among the biggest sources of pressure over the past several months. A sustained turnaround in equity inflows, coupled with lower oil prices, could provide the currency with much-needed support.
Meanwhile, most Asian currencies weakened on Monday after an upside surprise in US payrolls strengthened expectations that the Federal Reserve could raise interest rates in December.
(With inputs from Reuters)
