The Indian rupee strengthened against the US dollar on Tuesday, recovering part of its recent losses. In early trade, the rupee rose by about 18 paise to 90.12 against the dollar, compared with its previous close of around 90.30 in the last session, according to forex market data. The gain snapped a four-day losing streak, during which the currency had steadily weakened.
Traders attributed the rebound to a slight easing in the US dollar and some recovery-driven buying in the rupee at lower levels. The US dollar index, which tracks the greenback against six major currencies, was trading marginally lower near the 103–104 range in early Asian hours, offering support to emerging market currencies.
In the previous sessions, the rupee had come under pressure due to persistent dollar demand and weak risk appetite. Rising crude oil prices also weighed on sentiment. Brent crude was trading close to $78–80 a barrel, keeping concerns alive for India, which imports more than 80 per cent of its oil requirements. Higher crude prices tend to widen the trade deficit and weaken the rupee.
On Tuesday, the rupee opened on a firmer note as some dollar demand eased near the 90.20–90.30 levels. Traders also pointed to exporter dollar selling, which provided additional support. Short-covering by traders who had earlier bet against the rupee helped the currency strengthen in early trade.
Despite the rebound, analysts cautioned that the rupee remains vulnerable to global cues. Factors such as expectations around US interest rates, movement in crude oil prices, and ongoing geopolitical tensions are likely to dictate near-term currency trends. Any renewed surge in the dollar or a sharp spike in oil prices could again push the rupee lower.
The Reserve Bank of India (RBI) is expected to continue monitoring the currency closely. While the central bank has been intervening intermittently to curb excessive volatility, it has allowed the rupee to adjust in line with broader market conditions.
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