The Indian rupee opened 19 paise stronger at 95.16 against the US dollar in early trade on Friday (July 3), compared to Thursday's closing level of 95.35, according to The Hindu. At the interbank foreign exchange market, the rupee opened at 95.20 and touched 95.16, registering the 19 paise gain from its previous close. This represents a continued recovery from Wednesday's close of 95.16, marking sustained strength after the currency's steepest single-day fall in nearly three weeks. The opening gain was aided by a broadly weaker dollar after a tepid U.S. jobs report pushed back market expectations for imminent rate hikes by the Federal Reserve. The rupee's strength helped support Indian equity markets, with the Sensex jumping 545.89 points to 78,048.01 and the Nifty surging 173.85 points to 24,346.90 in early trade. GIFT Nifty futures had signalled a positive start, rising 150 points to 24,414 as of 7:43 am IST, as reported by The Indian Express.
According to Firex forecasts, the rupee is expected to open at 95.16 and remain in the range of 94.80 to 95.50. At the interbank foreign exchange market, the rupee opened at 95.20 and touched 95.16, registering the 19 paise gain from its previous close. Forex traders noted that despite a weaker dollar index and lower crude oil prices, the rupee is still facing pressure from robust dollar demand from importers and corporate hedgers. Unless demand exceeds supply, the rupee could gain back to 95.00 levels today after having fallen for three consecutive days. Exporters who could not sell earlier may cover their positions for July now while importers are advised to keep buying the dips. The currency's performance comes amid a mixed-to-negative trend across Asian currencies, with six of the nine currencies weakening against the US dollar. In Asia, Japan's Nikkei 225 rose 0.74 per cent to 69,243.68 by the midday break, although it remained on track for a marginal weekly decline, as per The Indian Express.
Foreign investors extended their selling spree in June, withdrawing ₹49,340 crore (USD 5.16 billion) from Indian equities, triggered by a combination of early-month global risk aversion, a preference for developed markets, soaring US bond yields, and stretched valuations in the domestic market, as reported by The Hindu BusinessLine. According to data from the Central Depository Services (India) Ltd, the total withdrawals by Foreign Portfolio Investors (FPIs) from Indian equities have surged to ₹2.7 lakh crore so far in 2026, surpassing the ₹1.66 lakh crore pulled out during the entire calendar year 2025. On Thursday, foreign institutional investors sold equities worth ₹311.82 crore on a net basis, with FPIs having sold a record $29.46 billion worth of Indian stocks so far this year. Market participants widely expected the Reserve Bank of India (RBI) to defend the 95 level, especially after signs of intervention in recent trading sessions. Domestic institutional investors (DIIs) remained net buyers for an eighth consecutive session on Thursday, helping the Nifty 50 and Sensex gain 1.3 per cent over the previous two sessions.
Global markets took cues from a softer US labour market report released overnight, with data showing US job growth slowed sharply in June while payroll figures for the previous two months were revised lower, signalling a cooling economy, according to CNBC TV18. Following the report, traders sharply reduced expectations of a September rate hike by the Federal Reserve, with market-implied probabilities for another increase falling to nearly 53% from around 75% before the data release. The technology-heavy Nasdaq closed lower overnight after the payrolls report showed job creation missed expectations by 57,000, reinforcing hopes that US interest rates may remain lower for longer. Brent crude, the global oil benchmark, slipped below $72.25 per barrel, trading lower by 0.63 per cent in futures trade, following reports of positive progress in indirect talks between the United States and Iran, as reported by The Hindu. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 100.81, lower from its recent 15-month high of 101.6.
CR Forex Advisors MD Amit Pabari warned that "if the rupee cannot strengthen on positive global cues, any negative development could easily push USDINR towards the 95.80 to 96.00 zone." He noted that the Reserve Bank of India is focused on restoring its forex reserves which have declined from a February peak of USD 728.49 billion to around USD 672.6 billion. Hence, the central bank has less room to allow the rupee to appreciate freely, "even when global conditions are supportive," he said. Asian currencies traded on a positive bias against the US dollar, with the majority of regional currencies gaining between 0.1% and 0.4% while regional equity markets advanced. MSCI's broad index of Asian shares rose more than 1%, reflecting improved global risk sentiment. The Malaysian Ringgit emerged as the top performer, appreciating 0.270%, followed by the Philippines Peso (+0.202%) and the Thai Baht (+0.178%). The combination of a softer dollar, easing Fed concerns and continued domestic institutional support helped Indian markets begin the day on a positive note.
