The Indian Rupee opened steady in early trading, maintaining stability at 85.17 against the U.S. Dollar. This opening level reflects the currency's current position in the foreign exchange market without significant movement from previous levels.

Currency Market Performance

The rupee's steady opening indicates balanced market conditions in the foreign exchange segment. The currency maintained its position at the 85.17 level, suggesting stable trading sentiment in the early hours of the session.

Market Dynamics

The stable opening of the Indian Rupee against the dollar reflects current market equilibrium. Currency traders are observing the rupee's performance at this level, with the exchange rate showing minimal volatility during the initial trading period.

The 85.17 level represents the rupee's starting point for the trading session, providing a baseline for market participants to assess subsequent movements. This steady opening suggests that immediate market pressures on the currency remain balanced.

The Indian rupee snapped its four-day losing streak on Tuesday, appreciating 12 paise to settle at 90.18 against the US dollar. The recovery came as the US dollar index declined following disappointing American economic data, though domestic factors continued to weigh on the currency's performance.

Currency Performance Overview

At the interbank foreign exchange market, the rupee opened at 90.22 against the US dollar and traded within a range of 90.08-90.25 before closing at the day's provisional rate. This represented a significant improvement from Monday's close of 90.30, marking a 12 paise gain for the domestic unit.

Market Factors and Analysis

Forex traders attributed the rupee's recovery to a weaker US dollar index, which declined 0.06% to 98.21 following below-expectation US ISM Manufacturing PMI data. However, several factors prevented sharper gains for the domestic currency, including weak domestic equity markets and ongoing geopolitical tensions between the US and Venezuela.

Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, expects the rupee to trade with a negative bias due to risk aversion in global markets stemming from US-Venezuela geopolitical tensions. He noted that surging crude oil prices and foreign institutional investor outflows may further pressure the currency, though a weak dollar and potential RBI intervention could provide support at lower levels.

Domestic Market Performance

Domestic equity markets faced significant pressure during the trading session. The benchmark indices recorded notable declines, with foreign institutional investors continuing their selling spree.

Economic Indicators

India's services sector showed signs of moderation in December, with growth rates easing to an 11-month low. The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 59.8 in November to 58.0 in December, indicating the slowest expansion rate since January 2025. Companies also refrained from recruiting additional staff as incoming new work and output expansion rates slowed.

Brent crude, the global oil benchmark, traded 0.47% higher at $62.05 per barrel in futures trade, adding to inflationary pressures that could impact the rupee's future performance. The combination of higher oil prices and continued foreign investor outflows presents ongoing challenges for the domestic currency despite Tuesday's recovery.