The Indian rupee recovered 16 paise from its all-time low, trading at 95.52 against the US dollar in early trade on Monday. The domestic currency opened at 95.52 per dollar, compared to its previous close of 95.68. This recovery was supported by positive domestic equities and a weak greenback in the global markets.
Factors Behind the Recovery
Forex traders attributed the rupee's recovery to a weak US dollar and a decline in crude oil prices. Additionally, positive sentiment in the domestic equity markets provided support to the local unit. The Sensex and Nifty opened higher, boosting investor confidence.
Global Cues
The US dollar index fell against a basket of major currencies, as risk appetite improved in global markets. Meanwhile, Brent crude oil prices eased, reducing pressure on India's import bill. However, sustained foreign fund outflows and geopolitical tensions remain key concerns for the rupee.
Market Outlook
Analysts expect the rupee to trade in a broad range, with the Reserve Bank of India likely intervening to prevent excessive volatility. The focus will be on upcoming US economic data and Federal Reserve policy cues. A sustained recovery in the rupee will depend on further improvement in global risk sentiment and domestic macroeconomic fundamentals.
