Indian Rupee Strengthens Against the Dollar

The Indian rupee concluded the week on a high note, appreciating by 24 paise to close at Rs 86.87 against the US dollar, up from Rs 87.11 the previous day. This marks the rupee's best weekly performance in over two years, with a 0.7% week-on-week increase, as the dollar faced a downturn against major global currencies.

Global Currency Movements Impact

The dollar's decline was influenced by concerns over the US economy's slowdown and uncertainties surrounding tariff policies. The euro's rally, supported by the European Central Bank's hawkish rate cut and rising German bond yields, further pressured the dollar. The dollar index fell by over 3.5%, with the euro reaching its highest point against the dollar since November 2024.

Asian Markets and RBI's Role

Asian currencies experienced modest gains, ranging between 0.1% and 0.4%. Dealers speculated that the Reserve Bank of India (RBI) might have intervened in the forex markets after the rupee dipped below Rs 87.20 earlier in the day.

Equity Markets and Investor Sentiment

Equity markets remained subdued, with the BSE Sensex slipping by 8 points to 74,333, while the Nifty rose 7.8 points to 22,553. Both indices had seen significant gains in the previous two sessions. Foreign institutional investors net sold Rs 2,377 crore in equities, according to exchange data. Investors are now keenly awaiting US Fed chairman Jerome Powell's commentary and the latest US jobs data, with economists forecasting the unemployment rate to remain unchanged at 4%.