Mumbai, Aug 1: The Indian rupee strengthened against the US dollar in early trade, supported by softer crude oil prices and improving investor sentiment in global financial markets.
Currency traders said declining international oil prices reduced concerns over India’s import bill, while a weaker US dollar index provided additional support to the domestic currency. Positive trends in equity markets also encouraged foreign investment flows, helping the rupee extend its gains.
Market participants noted that easing geopolitical tensions in parts of West Asia improved overall risk appetite, leading investors to increase exposure to emerging-market assets, including Indian equities and bonds.
Despite the recovery, analysts cautioned that exchange rate movements remain vulnerable to fluctuations in global energy prices, foreign fund flows and monetary policy signals from major central banks.
Economists expect the rupee to trade within a narrow range in the near term as investors closely monitor international developments, inflation trends and upcoming macroeconomic data that could influence currency markets.
