The rupee is doing well. The currency has broken over the psychologically significant 84/$ levels and is up almost 1% daily. These levels were last observed in June 2024. With Donald Trump’s victory in the November 2024 US presidential election, the currency has now erased all losses. Strong dollar inflows and short-covering are being cited by traders as optimism over a trade agreement between the United States and India grows.
The rupee gained 0.8% for the day, peaking at 83.78 in early trading. The morning exchange rate was 83.93 to the US dollar. The Indian rupee has increased by around 2% this week. Uncertainty over Trump’s tariff proposals caused the rupee to plummet to an all-time low of 87.95 in February. However, it recovered significantly in March and April thanks to portfolio inflows and expectations that India would be among the first countries to strike a trade agreement with the United States.
Dollar sales by exporters and a reduction in negative bets on the rupee have also been beneficial. According to a Reuters poll, investors have increased their optimistic bets on the rupee, joining the majority of its regional counterparts.
The constant influx of foreign investors is one of the main causes of the currency’s strength. For the eleventh consecutive session, they have been net buyers of Indian stocks.
Foreign investors’ constant inflows are one of the main causes of the currency’s strength. In Indian stocks, they have been net purchasers for the eleventh consecutive day. This is the longest influx period in the past two years.
The relative weakening of the dollar has also benefited the Indian rupee. From its high of 110 in January, it has dropped considerably and is currently trading close to 100. With new optimism of U.S.-China trade discussions, Asian currencies were generally firmer, with the offshore Chinese yuan rising 0.3%.
