Rupee Slips 9 Paise to 94.50 Against US Dollar in Early Trade

The Indian rupee declined 9 paise to open at 94.50 against the US dollar in early trade on Friday, driven by the broad strength of the American currency and overnight gains in crude oil prices. Despite touching an early high of 94.36, external market pressures and geopolitical tensions continue to influence currency movements.

The Indian rupee depreciated by 9 paise to 94.50 against the US dollar in early trade on Friday, weighed down by the broad strength of the American currency in overseas markets and overnight gains in crude oil prices.

At the interbank foreign exchange market, the domestic unit opened at 94.50 against the greenback, registering a fall from its previous close of 94.41 recorded on Thursday. However, during the initial hours of trade, the rupee staged a mild recovery to touch a high of 94.36 against the US dollar.

According to forex traders, a recovery in the US dollar index and rising crude oil prices exerted downward pressure on the domestic currency. The dollar index, which measures the greenback against a basket of six major currencies, was trading higher by 0.17 percent at 101.71.

Meanwhile, global oil benchmark Brent crude was trading higher by 2.04 percent at $100.30 per barrel in futures trade.

Market analysts point to a mix of global economic indicators influencing the current trade environment. Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, noted that the Bank of England recently kept its policy rates unchanged, while US weekly unemployment claims came in better than forecasts.

"We expect the Rupee to trade with a positive bias on strength in domestic markets and fresh FII inflows," Choudhary said, while adding that ongoing tensions between Ukraine and Russia and attacks in the Middle East may cap any sharp upside potential.

On the domestic front, equity markets presented a mixed picture during early trade. The 30-share BSE Sensex rose 33 points to trade at 79,343.06, while the broader NSE Nifty declined 52.95 points to 24,477.40. Exchange data showed that Foreign Institutional Investors (FIIs) remained active in the market, turning net buyers on Thursday with equities worth ₹14,974.68 crore.

"Currency fluctuations, driven by global crude oil prices and shifts in the US dollar index, have a direct impact on import costs and broader macroeconomic stability. While domestic equity strength and institutional inflows provide support to the Indian rupee, businesses—particularly startups reliant on imported raw materials or cross-border transactions—must factor in foreign exchange volatility into their financial planning and risk management strategies during periods of geopolitical uncertainty." — Dr. Shishir Gupta, Founder & CEO, StartupLanes