MUMBAI: The rupee finished the week on a strong note, closing at Rs 86.87 against US dollar, up 24 paise from the previous day’s Rs 87.11. This represented its best weekly performance in over two years, rising 0.7% week-on-week, as the dollar weakened against most major currencies.
The greenback was on track for its worst week in more than two years, under pressure from concerns over the US economy’s slowdown and ongoing uncertainties about tariff policies. The euro’s rally, boosted by the European Central Bank’s hawkish rate cut and surging German bond yields, also contributed to the dollar’s decline.
The dollar index fell by over 3.5%, with euro reaching its highest point against dollar since Nov 2024. Meanwhile, Asian currencies gained modestly, rising between 0.1% and 0.4%. Dealers said RBI may have interevened in forex markets after rupee dipped below Rs 87.20 earlier in the day.
Equity markets were subdued, with BSE Sensex slipping by 8 points to 74,333, while Nifty rose 7.8 points to 22,553. Both indices had seen sharp gains in previous two sessions. Foreign institutional investors net sold Rs 2,377 crore in equities, according to exchange data. Investors are now awaiting US Fed chairman Jerome Powell’s commentary and US jobs data.
Economists are forecasting unemployment rate remaining unchanged at 4%. A significant miss in the jobs report could lead to adjustments in expectations for the dollar.