The Indian rupee strengthened against the US dollar on Thursday, December 18, 2025, closing higher for the session. The domestic currency gained ground, supported by specific global factors, though its upward movement was limited by domestic market conditions.
Rupee's Performance and Closing Level
At the close of trading, the rupee settled at 90.26 against the US dollar. This marked an appreciation of 12 paise from its previous closing level. The day's trading reflected a cautious optimism in the forex market, with the rupee managing to hold on to its gains by the end of the session.
Key Factors Supporting the Rupee
Forex traders pointed to stable global crude oil prices as a significant factor providing support to the Indian currency. Brent crude oil prices were hovering near the USD 59 per barrel mark. Since India is a major importer of crude oil, lower or stable prices reduce the nation's import bill and the subsequent dollar demand, which in turn supports the rupee's value at lower levels.
Factors Capping the Gains
Despite the supportive crude oil dynamic, the rupee's appreciation was not more pronounced due to two countervailing forces. Firstly, the US dollar index (DXY) witnessed a recovery, making the greenback stronger against a basket of global currencies. Secondly, weakness in the domestic equity markets created headwinds. When domestic markets perform poorly, it can lead to foreign fund outflows, increasing demand for dollars and limiting the rupee's potential gains.
The interplay of these factors—support from oil prices and pressure from a strong dollar and local market sentiment—defined the rupee's trajectory on Thursday. The currency's modest gain of 12 paise reflects this balanced tug-of-war in the financial markets.
