Rupee Opens Higher at ₹85.59 Amid US Fiscal Concerns

The Indian rupee commenced Thursday's trading session on a stronger note, opening at ₹85.59 against the US dollar, a 5-paise appreciation from the previous close of ₹85.64. This uptick comes as the US dollar faces pressure due to mounting fiscal deficit concerns in the United States. 

US Fiscal Policies Weigh on Dollar

The US dollar index, which measures the greenback against a basket of six major currencies, declined for the fourth consecutive day, registering a 0.07% drop to 99.49. This downward trend is attributed to investor apprehensions surrounding President Donald Trump's proposed tax-cut bill, estimated to cost between $3.8 trillion and $4.5 trillion over a decade. The US House of Representatives Rules Committee has advanced the bill, intensifying concerns over the nation's fiscal health. 

Impact on Indian Currency

The rupee's appreciation is influenced by the dollar's weakness and the strengthening of other Asian currencies, including the Chinese yuan and Japanese yen. However, the rupee's gains are tempered by persistent demand for dollars from oil companies and importers. The rupee is expected to trade within the ₹85.25 to ₹85.75 range for the day.

The narrowing yield differential between India and the US is making Indian assets less attractive, leading to capital outflows and exerting additional pressure on the rupee. Furthermore, rising geopolitical tensions in the Middle East have pushed crude oil prices higher, adding to the rupee's challenges.

Crude Oil Prices and Market Outlook

Brent crude prices experienced a slight increase of 0.08%, trading at $64.96 per barrel, while WTI crude gained 0.16% to trade at $61.67. Market participants are closely monitoring the rupee's movement, with technical indicators suggesting strong resistance near ₹85.80 and immediate support at ₹85.20-₹85.30 levels. The rupee's trajectory will largely depend on global economic developments, US fiscal policy decisions, and crude oil price movements in the coming days.

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