The **Indian rupee closed at 94.49 against the US dollar on Friday, marking its sixth consecutive session of gains, as reported by The Hindu BusinessLine. The currency settled 2 paise higher from its previous close of 94.51, supported by positive foreign inflows and increased risk appetite. At the interbank foreign exchange market, the rupee opened at 94.53 and touched an intra-day high of 94.46 and a low of 94.53 during the session. Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, noted that the rupee gained on positive domestic markets, foreign inflows and FII buying, with the local unit gaining 27 paise to settle at 94.95 against the US dollar on Tuesday. The rupee has demonstrated remarkable resilience, with gains of 22 paise on Thursday, 21 paise on Friday, 2 paise on Monday, and 27 paise on Tuesday, showing consistent upward momentum. We expect the rupee to trade with a positive bias on positive global markets and improved global risk sentiments. Foreign inflows and reduced expectations of a rate hike following dovish comments by Fed Governor Christopher Waller may also support the rupee.
Markets opened on a positive note on Friday, with the Sensex rising 362.57 points to settle at 76,515.43 and the Nifty gaining 24.25 points to 23,897.70, as reported by The Hindu BusinessLine. The Sensex, which closed at 76,152.86 on Thursday, opened at 76,657.02 and was trading at 76,643.32, up 490.46 points or 0.64 per cent. The Nifty 50, which ended the previous session at 23,873.45, opened at 23,910.90 and was trading at 23,914.35, up 40.90 points or 0.17 per cent, as of 9.21 AM. Among the top gainers on the Nifty 50, Tech Mahindra rose 1.44 per cent to ₹1,621, TCS gained 1.32 per cent to ₹2,350.70, and Wipro advanced 1.27 per cent to ₹177.96. Reliance Industries climbed 1.21 per cent to ₹1,318.20, while Infosys added 1.14 per cent to trade at ₹1,143.20. The IT sector's strong showing came after the index fell nearly 1 per cent in the previous session.
Brent crude was trading higher by 0.01 per cent at $95.53 per barrel in futures trade, on escalating US-Iran tensions and fears of disruption to oil flows through the Strait of Hormuz, as reported by The Hindu BusinessLine. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.11, higher by 0.21 per cent on safe-haven demand amid renewed US-Iran tensions. Despite the rupee's strength, rising crude oil prices and escalating US-Iran geopolitical tensions may cap these upside gains. Forex traders noted that the rupee is set to strengthen due to robust foreign capital inflows and active RBI intervention, but elevated crude oil prices and any fresh escalation of tensions between the US and Iran may cap sharp upside. Traders may take cues from the non-farm payrolls report from the US, with USDINR spot price expected to trade in a range of 94.15 to 94.75.
The rupee's remarkable appreciation has been fueled by massive inflows into Foreign Currency Non-Resident (Bank) deposits, with FCNR(B) deposits touching a massive $127.23 billion during the 85-day period (June 8-August 31, 2026) that the facility was open. As per Reuters, inflows linked to these schemes have crossed $136 billion, significantly exceeding market expectations and providing a strong boost to the rupee. Aditi Gupta, Economist at Bank of Baroda, termed the RBI's measures to attract foreign capital flows as a 'resounding success', noting that higher interest rates boosted FCNR(B) demand as several banks raised rates on 3-5 year FCNR(B) deposits from around 2-4 per cent to 6-7 per cent, making the deposits more attractive to NRIs. Radhika Rao, Senior Economist at DBS Bank, assessed that inflows due to RBI's measures are likely to push up the foreign reserves stock to a fresh high past $750 billion in the coming weeks, providing considerable firepower to defend the currency.
The RBI has stepped up its support for the rupee in recent sessions, armed with a flood of deposits from non-residents that have helped it shield the local currency from a surge in oil prices and rising US Treasury yields. According to The Hindu BusinessLine, the RBI has been supplying dollars to curb volatility and the rupee will likely remain in the ₹94.50-95.50 range as long as Brent crude stays below $100 a barrel. The currency has found support from more forceful Reserve Bank of India intervention, complemented by the RBI's update on the inflows mobilised through its special schemes. Krishna Bhimavarapu, APAC economist at State Street Investment Management, noted that the FCNR scheme achieved its intended objective of supporting external funding environment and stabilizing the rupee, with FCNR flows potentially exceeding $100 billion. Dilip Parmar from HDFC Securities observed that the technical setup has turned weak for the spot USDINR, weighed down by a bearish chart pattern of lower highs and lower lows on the daily time-frame, with immediate support at ₹94.10 and resistance at ₹94.95.
