Indian Rupee Gains 21 Paise to 85.87 against U.S dollar

The Indian rupee strengthened against the U.S. dollar, rising 21 paise to 85.87 in early trade on June 26, 2025. This uptick was driven by a weaker dollar in global markets, with the dollar index dropping 0.27% to 97.41.

However, rising global crude oil prices and foreign institutional investor (FII) outflows capped sharper gains for the rupee. At the interbank foreign exchange, the rupee opened at 85.91 before climbing to 85.87, compared to its previous close of 86.08.

The dollar’s decline was influenced by reports of U.S. President Donald Trump planning to announce a successor to Federal Reserve Chairman Jerome Powell earlier than anticipated, potentially signaling expectations for interest rate cuts. Meanwhile, Brent crude oil prices rose 1.30% to $68.01 per barrel, driven by a significant U.S. inventory drawdown, which reflects strong demand but pressures India’s import-heavy economy. Forex traders noted that the rupee’s movement was also restrained by dollar purchases from oil companies and foreign portfolio investors selling equities.

In the domestic market, the Sensex gained 163.27 points to 82,918.78, and the Nifty rose 64.35 points to 25,309.10, reflecting cautious optimism. Posts on X echoed this sentiment, with some users highlighting the rupee’s resilience despite external pressures, such as Middle East tensions and global trade uncertainties. Analysts expect the rupee to trade within a range of 85.75 to 86.25 in the near term, with the Reserve Bank of India likely to intervene to manage volatility.

This modest gain in the Indian rupee against the dollar reflects a balance of global and domestic factors, with oil prices and FII flows remaining key influences to watch.

Published in SouthAsianDesk, June 26th, 2025

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