Rupee opens lower at 85.45 against US dollar, down 7 paise

The Indian rupee opened lower against the US dollar in early  trading, mirroring pressures from the overseas currency market and commodity prices, though positive equity flows helped provide some counterpoise.

At the foreign exchange market for interbank, the home currency began trading at ₹85.56 against the dollar. Although it was able to recover some early losses, the rupee was last trading at ₹85.45 in early deals. This represents a 7-paise decline from its last closing value. On Wednesday, the rupee had closed 2 paise higher, ending the day at ₹85.38 against the dollar.

Factors Weighing on the Rupee

Forex traders have identified several factors contributing to the rupee's weaker opening. One of them was the strengthening of the US dollar overseas.

The American currency was said to have gained strength following a US federal court ruling that barred a broad reciprocal tariff order signed by President Donald Trump. This said to have been positive in fueling hopes of an end to global trade uncertainty and underpinning the relative strength of the dollar.

The Dollar Index, which tracks the performance of the greenback against a basket of six other currencies, was trading higher by 0.40 per cent at 100.18.

The rupee was subdued by a rise in crude oil prices. Brent crude, the global benchmark, rose by 1.11 per cent, to $65.62 per barrel in the future.

Higher global prices of oil generally weigh on the currencies of net oil-importing countries such as India. The source further mentions a CRUDEOIL price of 5,366.00 (+60.00).

Disappointing economic statistics also blunted the mood. Official data issued on Wednesday indicated that India's industrial production growth slowed to 2.7 per cent in April 2025. The slower growth was due to a weak performance from the manufacturing, mining, and power industries in the previous month.

Supportive Indicators

Despite these headwinds, the rupee's depreciation was to some extent neutralised by supportive flows and market trends. Foreign fund inflows into the Indian market supported the limit on the rupee's depreciation.

Exchange data show that Foreign Institutional Investors (FIIs) were net buyers on Wednesday, registering purchases of ₹4,662.92 crore on a net basis.

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