The Indian rupee touched a new all-time low of 91.93 against the US dollar on Friday, January 23, as persistent corporate and importer demand for the greenback overshadowed brief recovery attempts. The currency weakened past its previous record low of 91.74, with early gains proving short-lived despite some improvement in global market conditions.

Market Dynamics and Recovery Attempts

The rupee's performance reflected mixed global cues, with investor sentiment showing marginal improvement after US President Donald Trump adopted a softer stance on tariff threats against Europe. The moderated rhetoric, particularly regarding Greenland-related trade concerns, helped ease immediate trade-war anxieties and led to a modest correction in the dollar's strength.

Forex traders noted that the reduced geopolitical tension provided temporary support to emerging market currencies, including the rupee, allowing for slight recovery from intraday lows. However, this relief proved insufficient to counter the underlying pressure from strong dollar demand in the domestic market.

Underlying Pressure Factors

Market participants identified several key factors maintaining downward pressure on the rupee. Persistent foreign portfolio outflows continue to weigh on the currency amid elevated global geopolitical uncertainty. The combination of corporate dollar requirements and ongoing investor risk aversion has created sustained demand for the US currency.

Traders highlighted the pending India-US trade agreement as a potential stabilizing factor for the rupee's future performance. "Until geopolitical risks ease and the trade deal materialises, the rupee is likely to remain vulnerable to external shocks," forex dealers stated.

Expert Analysis and Outlook

Amit Pabari, Managing Director at CR Forex Advisors, suggested that much of the global risk appears to be already reflected in the rupee's current valuation. This assessment opens possibilities for a consolidation phase and potential partial recovery if risk sentiment stabilizes in the coming period.

Pabari noted that the 92.00 level represents strong resistance for the dollar-rupee pair, while sustained Reserve Bank of India support could potentially guide the exchange rate back towards the 90.50-90.70 zone in the near term. The outlook remains contingent on global risk sentiment stabilization and continued central bank intervention measures.

Market sentiment improved significantly as the Indian rupee strengthened and oil prices declined following eased geopolitical tensions. The currency and commodity movements came after Trump stepped back from aggressive trade rhetoric, providing relief to global markets and reducing immediate concerns about potential trade conflicts.

Currency and Commodity Markets Show Relief

The rupee demonstrated notable strength in early Friday trading, gaining 17 paise to reach 91.41 against the US dollar. This improvement reflected enhanced investor confidence as Trump softened his stance on tariff threats against Europe, particularly those linked to Greenland disputes.

Oil markets experienced significant downward pressure, with prices sliding approximately 2% to reach one-week lows. The decline followed Trump's moderated approach toward both Greenland and Iran, alongside positive developments that could potentially lead to resolution of the Russia-Ukraine conflict.

Corporate Performance and Market Movements

APL Apollo Tubes shares continued their strong performance, trading with gains exceeding 3% for the second consecutive day. The stock had surged over 5% on Thursday following quarterly results announcement, effectively breaking a three-day losing streak. This momentum has resulted in a 7% increase for January, marking the company's best year-start performance since 2018.

Technology Sector Developments

The technology sector witnessed mixed developments, with both expansion plans and cost-cutting measures making headlines. Amazon announced plans for a second wave of layoffs within three months, targeting thousands of employees as part of a broader culture reset initiative. According to employee discussions, the layoffs could be announced on January 27 or 28, with some Polish employees already affected this week.

Conversely, SpaceX continues advancing its cost-reduction initiatives in space technology. Elon Musk indicated that satellite launch costs could decrease dramatically as the company works toward making Falcon 9 rockets fully reusable. Historical data shows launch costs to low-Earth orbit have already fallen from $65,000 per kilogram to $1,500 per kilogram by 2021, with potential for 100-fold further reductions.

Space Industry Milestones

Blue Origin achieved another significant milestone by successfully completing its 38th New Shepard flight, sending six passengers to the edge of space. This marked the first spaceflight of 2026 for the aerospace company founded by Jeff Bezos, continuing the commercial space tourism sector's expansion.

Government and Policy Updates

The Indian government announced details for the upcoming Census 2027, specifying 33 questions citizens must answer during the first phase beginning April 1. The houselisting and housing enumeration phase will occur over a 30-day period between April 1 and September 30, with specific timing determined by individual states and Union Territories.

Looking ahead to Budget 2026, industry experts from gold, jewellery, gems and mining sectors are advocating for policy continuity and tax rationalization measures. Key recommendations include revival of gold bonds, digital incentives, and GST relief for the jewellery sector to unlock household savings and strengthen export performance.