Rupee tops 84 level, traps INR bears; what recent rally suggests
FPIs' dollar selling caused USD-INR pair to break the recent 84.95 low and, thereafter, some stops were triggered, said IFA Global Research. The RBI does not seem to be buying dollars too aggressively, it added.
- May 2, 2025,
- Updated May 2, 2025 11:52 AM IST
The recent sharp rally in rupee might have trapped the currency bears and is leading to unwinding of shorts, said experts as the domestic currency hit the highest level today since October 2024.
In a post on social media platform X, market expert Sandip Sabharwal said the sharp rise in rupee against the dollar suggests that the massive shorts on the rupee seem to have got trapped, resulting in triggering of stop losses.
Earlier today, the domestic currency topped the 84 level against the greenback, the first time since October 2024. At last count, the rupee was trading at 83.83, up 0.7 per cent over its previous close.
IFA Global Research noted that the domestic currency had strengthened 76 paise on Wednesday and was strongest it has been against the dollar in five months. It added that Wednesday was also the biggest single-day gain for the rupee in 29 months.
"FPIs' dollar selling caused USD-INR pair to break the recent 84.95 low and, thereafter, some stops were triggered. Also, the RBI does not seem to be buying dollars too aggressively," it said.
The recent rupee rise has been aided by positive comments from Trump on US-India tariff talks, suggesting a potential deal could be in the works, said CR Forex Advisors.
"Additionally, broader Asian currency strength, with regional peers rallying up to 0.8 per cent, provided a tailwind. The rupee’s 2 per cent rise in March marked its best performance since November 2018, aided by a weaker US dollar outlook," it said.
Looking ahead, CR Forex Advisors expects rupee to test 84.25–84.50 range, with a 75-85 per cent probability of moving back to 85 levels.
Emkay Global in a strategy note said external measures have been subsided, adding that pressure on the Rupee and forex reserves has notably diminished, with stability returning aided by FPI flows.
"The DXY correction of 10 per cent from its peak is meaningful, now below 100 after 100 days of Trump’s tumultuous tenure. Tariff risks appear largely priced in, with the path ahead skewed toward constructive trade negotiations broadly favorable for India," it said.
The recent sharp rally in rupee might have trapped the currency bears and is leading to unwinding of shorts, said experts as the domestic currency hit the highest level today since October 2024.
In a post on social media platform X, market expert Sandip Sabharwal said the sharp rise in rupee against the dollar suggests that the massive shorts on the rupee seem to have got trapped, resulting in triggering of stop losses.
Earlier today, the domestic currency topped the 84 level against the greenback, the first time since October 2024. At last count, the rupee was trading at 83.83, up 0.7 per cent over its previous close.
IFA Global Research noted that the domestic currency had strengthened 76 paise on Wednesday and was strongest it has been against the dollar in five months. It added that Wednesday was also the biggest single-day gain for the rupee in 29 months.
"FPIs' dollar selling caused USD-INR pair to break the recent 84.95 low and, thereafter, some stops were triggered. Also, the RBI does not seem to be buying dollars too aggressively," it said.
The recent rupee rise has been aided by positive comments from Trump on US-India tariff talks, suggesting a potential deal could be in the works, said CR Forex Advisors.
"Additionally, broader Asian currency strength, with regional peers rallying up to 0.8 per cent, provided a tailwind. The rupee’s 2 per cent rise in March marked its best performance since November 2018, aided by a weaker US dollar outlook," it said.
Looking ahead, CR Forex Advisors expects rupee to test 84.25–84.50 range, with a 75-85 per cent probability of moving back to 85 levels.
Emkay Global in a strategy note said external measures have been subsided, adding that pressure on the Rupee and forex reserves has notably diminished, with stability returning aided by FPI flows.
"The DXY correction of 10 per cent from its peak is meaningful, now below 100 after 100 days of Trump’s tumultuous tenure. Tariff risks appear largely priced in, with the path ahead skewed toward constructive trade negotiations broadly favorable for India," it said.