Rupee Jumps 61 Paise to Settle at 86.07 Against U.S. Dollar on Dollar Weakness and Market Rebound

Mumbai: The Indian rupee surged 61 paise on Friday to close at 86.07 against the U.S. dollar, buoyed by a sharp correction in the greenback and a robust recovery in domestic equities. The upswing also comes in the wake of a positive policy move from Washington, further boosting forex market sentiment.

At the interbank foreign exchange, the rupee opened at 86.22, a 46-paise gain from its previous close. During intraday trade, the currency touched a high of 85.95 before settling provisionally at 86.07, marking its biggest single-day gain in weeks.

Dollar Weakens Sharply Globally

The dollar index, which tracks the greenback’s performance against a basket of six major global currencies, plunged by 1.52% to 99.335, reflecting a broad-based correction amid changing global risk sentiment and easing U.S. Treasury yields.

Forex traders attributed the rupee's strength to the cooling of the dollar rally, along with renewed foreign investor interest in Indian equities following a strong bounce in benchmark indices.

“Today’s rupee rally is largely driven by global dollar weakness and a surge in risk-on sentiment across Indian markets,” said a senior forex strategist at a private bank. “The timing of the U.S. tariff suspension has provided a much-needed tailwind.”

Trump’s Tariff Suspension Spurs Sentiment

Market reaction was further bolstered by U.S. President Donald Trump’s decision to suspend the 26% tariffs on Indian imports until July 9, a move that has been welcomed by Indian exporters and policymakers alike.

The announcement has led to renewed optimism around India-U.S. trade relations, reducing short-term uncertainty for exporters and importers and giving the rupee room to appreciate.

“The suspension of tariffs is not only a diplomatic win but a practical one that may reduce pressure on India’s current account in the near term,” noted an economist with a Mumbai-based think tank.

Domestic Equities Rebound Strongly

The rupee’s upward momentum was also aided by a sharp rebound in the Indian stock market, with key indices climbing on strong corporate earnings expectations and improved global cues. A surge in foreign institutional inflows further underpinned demand for the rupee.