The Indian Rupee weakened past the 86 mark on Thursday on likely foreign outflows from domestic equities as the dollar and crude oil prices remained under pressure.
However, on a positive note, Bofa Research expects the Indian rupee to strengthen to 84 against the greenback by December 2025 from the previous forecast of 87, according to reports. This is on account of broader weakness in the dollar and stable domestic fundamentals.
The dollar index fell for the fourth consecutive day as US President Donald Trump continued to push his sweeping spending and tax-cut bill. The index, which measures the greenback against a basket of six major currencies, was up 0.21 per cent at 99.77.
The US House of Representatives Rules Committee has approved the advancement of President Donald Trump’s sweeping tax cut plan, paving the way for a vote on the House floor. The proposal has raised concerns, with reports estimating that the tax cuts could cost between $3.8 trillion and $4.5 trillion over the next decade.
Following this, treasury yields advanced, with the benchmark 30-year treasuries rising to as high as 5.1 per cent.
Meanwhile, domestic equity markets ended lower on Thursday, with the Nifty50 and Sensex down 0.82 per cent and 0.79 per cent, respectively.
On the brighter side, the Chinese Yuan and Japanese Yen have started appreciating against the dollar, offering a measure of support to the rupee, Pabari said. “Technically, the dollar/rupee pair is expected to trade in a range as it faces strong resistance near 85.80, while immediate support lies at 85.20-85.30 levels.”
Crude oil prices traded on the lower side as the increase in US crude inventories overshadowed Israel-Iran tensions. Brent crude price was down 1.34 per cent to $64.04 per barrel, while WTI crude prices were 1.38 per cent lower at 60.72, as of 3:25 PM IST.
