The Indian rupee declined 6 paise to close at ₹90.29 against the US dollar on Wednesday, paring initial gains as market pressures outweighed likely central bank intervention. The currency faced headwinds from a strengthening dollar, foreign capital outflows, and rising crude oil prices, continuing its recent weakness against the greenback.

Trading Session Performance

During the interbank foreign exchange session, the rupee demonstrated significant volatility across a wide trading range. The currency opened at ₹90.26 and experienced substantial intraday movement before settling at its closing level.

Market Pressures and Analysis

Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, explained that while the Indian rupee gained in early trade due to likely central bank intervention, several factors capped sharp gains. "A strong dollar, FII outflows and a late fall in the domestic markets" contributed to the currency's decline, according to Choudhary's assessment.

Foreign institutional investors continued their selling pressure, offloading equities worth ₹1,499.81 crore on Tuesday according to exchange data. This sustained outflow pattern has been weighing on the rupee's performance in recent sessions.

Global Market Indicators

Key international market indicators showed mixed movements that influenced rupee trading:

The dollar index, which measures the greenback's strength against six major currencies, traded marginally lower at 99.11. However, Brent crude futures declined 1.04% to $64.81 per barrel, providing some relief from energy import costs.

Domestic Equity Market Impact

Domestic equity markets also faced selling pressure, which contributed to the rupee's weakness. The benchmark indices recorded notable declines during the trading session.

Market Outlook

Choudhary expects the rupee to trade with a negative bias due to risk aversion in global markets and ongoing geopolitical tensions. However, he noted that rising odds of a rate cut amid softening inflation and potential central bank intervention may provide support at lower levels.

Traders are focusing on the US Supreme Court ruling on the legality of Liberation Day tariffs, which could influence market sentiment. The USDINR spot price is expected to trade in a range of ₹89.95 to ₹90.50, according to market analysis.

The Indian rupee demonstrated resilience in early Wednesday trading, gaining 11 paise to reach 90.12 against the US dollar. This recovery came after the currency had declined 6 paise in the previous session to close at 90.23, marking a notable turnaround supported by favorable global market conditions.

Currency Performance Details

The rupee's trading session showed significant volatility with the currency opening at 90.26 before strengthening considerably during early deals. The following table captures the key trading levels:

Global Market Factors

Several international factors contributed to the rupee's recovery. The dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.01 per cent lower at 98.90, indicating weakness in the American currency. Additionally, Brent crude, the global oil benchmark, was trading 0.47 per cent lower at USD 65.17 per barrel in futures trade, providing relief to the import-dependent Indian economy.

Domestic Equity Market Performance

Domestic equity markets displayed positive momentum alongside the currency recovery. The benchmark indices showed the following performance:

Despite the positive market sentiment, foreign institutional investors continued their selling pressure, offloading equities worth ₹1,499.81 crore on Tuesday according to exchange data.

Market Outlook Factors

Forex analysts noted that traders remained cautious while monitoring geopolitical developments and awaiting US inflation numbers. These upcoming economic indicators are expected to provide crucial cues for the Federal Reserve's future policy decisions, which could significantly impact currency movements and global market sentiment in the coming sessions.