Mumbai, Feb 5: The rupee traded in a narrow range and gained 7 paise to 90.40 against the US dollar in early trade on Thursday, amid corporate dollar demand and as investors are awaiting for confirmation on the India-US trade deal.
Forex traders said market participants are now shifting focus from celebration to verification as no official documents have been released, and neither side has formally published the final terms.
Moreover, investors are awaiting cues from Friday’s RBI interest rate announcement.
At the interbank foreign exchange market, the rupee opened at 90.52 against the US dollar, then gained some ground to 90.40, registering a gain of 7 paise over its previous close.
On Wednesday, the rupee depreciated 15 paise to 90.47 against the US dollar.
In the initial trade, it also touched 90.53 against the American currency.
“Market is now waiting for confirmation and finer details before extending the rupee’s rally further,” CR Forex Advisors MD Amit Pabari said.
Pabari further said that attention has now turned to the RBI’s Monetary Policy Committee meeting.
“Markets widely expect the central bank to keep interest rates unchanged tomorrow, with a growing consensus that rate cuts are unlikely at least until the end of 2026,” he said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.18 per cent higher at 97.79.
Brent crude, the global oil benchmark, was trading 2 per cent lower at USD 68.07 per barrel in futures trade.
“Technically, the 89.80–90.00 zone has emerged as a strong support base. With this area holding firmly, the pair now appears poised to move back toward the 90.80–91.20 range with greater conviction,” Pabari said, adding that “going forward, RBI actions will also remain a key factor to watch along with confirmation of the final trade agreement and its exact terms.”
On the domestic equity market front, Sensex declined 278.72 points to 83,538.97 in early trade, while the Nifty was down 94.15 points to 25,681.85.
Foreign Institutional Investors purchased equities worth Rs 29.79 crore on Wednesday, according to exchange data. (PTI)
