Rupee recovers 7 paise from all-time low level to close at 88.28 against US dollar

Mumbai, Sep 12 (PTI) The Indian rupee recovered from all-time lows and settled for the day higher by 7 paise at 88.28 (provisional) against the US dollar on Friday, on weakness in the US dollar index and positive domestic markets.

Forex traders said the domestic unit traded in a tight range and hovered around its all-time low level as tariff-led pressure on India's exports and sustained foreign fund outflows dented investors sentiments.

At the interbank foreign exchange, the domestic unit opened at 88.39 and fell to an intraday low of 88.42 against the US dollar during the session. The domestic unit settled for the day at 88.28 (provisional), recovering 7 paise over its previous close.

On Thursday, the rupee slumped 24 paise and closed for the day at an all-time low of 88.35 against the US dollar. It had also touched the lowest-ever intraday level of 88.49 against the greenback.

"We expect the rupee to trade with a slight positive bias on overall weakness in the US dollar and rise in risk appetite in global markets on rising odds of a rate cut by Fed in its upcoming FOMC meeting next week," said Anuj Choudhary, Research Analyst, Currency and commodities, Mirae Asset ShareKhan.

"Markets now expect a 75 bps rate cut in 2025. However, FII outflows and uncertainty over trade tariff issues between India and the US may cap sharp upside," Choudhary said, adding that traders may take cues from University of Michigan consumer sentiment data from the US.

The USD-INR spot price is expected to trade in a range of 88 to 88.50, he said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.22 per cent to 97.74.

Brent crude, the global oil benchmark, was trading 0.65 per cent higher at USD 66.80 per barrel in futures trade.

On the domestic equity market front, Sensex jumped 355.97 points to settle at 81,904.70, while the Nifty climbed 108.50 points to 25,114.

Foreign Institutional Investors offloaded equities worth Rs 3,472.37 crore on Thursday, according to exchange data.

Meanwhile, Commerce and Industry Minister Piysuh Goyal on Thursday said that negotiations between India and the US on the proposed trade agreement, which began in March, are progressing in a positive atmosphere and both the countries are satisfied with the progress.

These remarks follow the announcement by Trump that there will be "no difficulty" for the two countries to come to a successful conclusion in trade talks and he looks forward to speaking with his "very good friend" Prime Minister Narendra Modi in the coming weeks. PTI DRR HVA