Rupee Gains 18 Paise to 90.12 Against Dollar in Early Trade
The Indian rupee strengthened by 18 paise to trade at 90.12 against the U.S. dollar in early trade on Tuesday, January 6, 2026. The domestic currency benefited from a softer U.S. dollar and a decline in global crude oil prices, offering some relief after recent weakness.
However, market participants noted that gains in the rupee remained limited due to persistent global and domestic headwinds, including geopolitical concerns, foreign fund outflows, and subdued sentiment in Indian equity markets.
Key Factors Supporting the Rupee
The initial appreciation in the rupee was primarily driven by weakness in the U.S. dollar across global markets. The dollar index, which measures the greenback’s performance against a basket of major currencies, hovered near 98.22, reflecting marginal softness.
In addition, crude oil prices eased in international markets. Brent crude futures were trading around $61.57 per barrel, down about 0.31%, reducing pressure on India’s import bill and supporting the local currency.
Pressures Limiting Further Upside
Despite favorable global cues, several factors capped sharper appreciation in the rupee. Remarks by U.S. President Donald Trump regarding potential tariffs on India weighed on investor confidence. Concerns over India’s trade relations and uncertainty surrounding a near-term trade agreement added to currency volatility.
Forex market participants also pointed to continued foreign institutional investor (FII) outflows as a drag on the rupee. On January 5, 2026, foreign investors sold Indian equities worth ₹36.25 crore, exerting pressure on the currency.
Adding to the cautious outlook, domestic equity markets opened weak. The Sensex fell by over 430 points to trade near 85,007, while the Nifty slipped below 26,150 in early trade. Weak equities typically reduce foreign inflows, limiting support for the rupee.
Recent Trend and Market Outlook
The rupee had ended the previous session on a weaker note, closing at 90.30 per dollar on January 5 after declining for four consecutive sessions. Heightened geopolitical uncertainty and demand for the safe-haven U.S. dollar had strengthened the greenback in recent days.
Currency experts caution that unless clarity emerges on global trade developments and geopolitical risks, the rupee may remain volatile. Some analysts believe the domestic unit could revisit levels closer to 91 per dollar if uncertainties persist and foreign flows continue to remain negative.
What Investors Should Watch
Going forward, investors will closely monitor developments related to U.S. trade policy, global crude oil prices, and macroeconomic data from the United States. Any signals on interest rate direction or easing inflationary pressures could influence dollar movement and, in turn, the rupee.
In the near term, the rupee is expected to trade in a narrow range, with global cues and equity market trends playing a decisive role in determining direction.
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