Rupee Strengthens 14 Paise to 94.61 Against US Dollar in Early Trade

The Indian rupee strengthened by 14 paise to 94.61 against the US dollar in early trade on Wednesday. According to forex traders, the currency's appreciation was supported by receding crude oil prices, a weaker US dollar, and ongoing inflows of foreign funds.

Buying momentum in the domestic equities market also favoured the local currency. This came as investors awaited the final outcome of the US midterm elections.

In the interbank foreign exchange market, the rupee opened at 94.61. It subsequently touched a high of 94.50 before paring some of those gains to trade at 94.61 against the greenback, marking a 14 paise increase from its previous session's closing level. In the preceding session on Tuesday, the Indian currency had risen by 9 paise to close at 94.75 against the US dollar.

Meanwhile, the dollar index—which measures the greenback's strength against a basket of six major currencies—traded down 0.54 per cent at 101.17. Additionally, US Treasury yields declined amid expectations surrounding the US midterm elections.

In global commodities, Brent crude, the international oil benchmark, traded lower by 0.49 per cent at $103.09 per barrel in futures trade, despite ongoing geopolitical uncertainties.

On the domestic front, the equity markets witnessed positive traction. The Sensex surged 435.10 points, or 0.57 per cent, to reach 77,352.95 in early trade. Simultaneously, the Nifty climbed 115.90 points, or 0.49 per cent, to 23,925.10. Both benchmark indices had ended more than 1.5 per cent higher in the previous session.

Data from stock exchanges showed that Foreign Institutional Investors (FIIs) remained net buyers for the third consecutive day on Tuesday, purchasing equities worth ₹6,836.81 crore.

"The appreciation of the rupee in early trade reflects positive macroeconomic cues, including consistent foreign fund inflows and declining crude oil prices. For businesses and startups engaged in cross-border trade or looking at capital deployment, monitoring these currency fluctuations alongside domestic equity trends is essential for effective financial planning and risk management." — Dr. Shishir Gupta, Founder & CEO, StartupLanes