Rupee strengthens to highest point since August 29

The Indian rupee opened stronger on Wednesday (September 17) at 87.84 per US dollar, then touched 87.81 in early trade, registering a gain of 28 paise from its previous close of 88.09. The currency is trading at its highest level since August 29, supported by a weaker dollar index and easing US Treasury yields ahead of the Federal Reserve’s policy decision.Brent crude futures were down 0.2% at $68.33 per barrel, offering further relief to the rupee.

Investors are awaiting the outcome of the Federal Open Market Committee (FOMC) meeting, where a 25-basis-point rate cut is widely expected. Market participants are also watching Fed Chair Jerome Powell’s remarks for clues on the pace of future cuts.
Dealers noted that the rupee was oversold in recent sessions, and short covering has aided its rebound. Sentiment also improved on signs of a thaw in India–US relations, which, along with renewed foreign portfolio inflows, has reassured rupee bulls.The Indian currency is up 0.3%, making it the best-performing Asian currency.

“USD/INR is expected to remain volatile, supported by a softer dollar and RBI stance. However, medium-term risks remain due to external pressures and policy uncertainty,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Amit Pabari, Managing Director, CR Forex Advisors, noted that the weak-dollar environment has given the rupee some breathing space.

“Near-term, the rupee is likely to face resistance around 88.20. A decisive break below 87.90 could open the way toward 87.50 and, if momentum continues, 87.20,” he said.

–With PTI inputs