Indian rupee extends winning streak as dollar, oil ease and stocks rally

MUMBAI: The Indian rupee strengthened for the fourth straight session on Thursday, aided by a broadly weaker dollar, lower oil prices and a surge in stocks, as well as a likely central bank intervention.

The Indian rupee ended 0.1% higher at 95.0550 per dollar. The currency has risen 2% so far this week after coming near record low levels last week.

Brent crude oil fell after potential US steps to ease restrictions on Russia’s “shadow fleet” tankers, though supply worries remained due to the conflicts in the Middle East and between Ukraine and Russia.

Meanwhile, Indian stocks were outliers in the region with an about 2% gain, even as benchmark indexes from South Korea to Japan fell between 8% and 2% on worries over AI-related debt funding.

“Expect investors to keep an eye on the debt of the big AI issuers today, and any further selloff could weigh on the dollar,” ING said.

The dollar index slipped from an 18-month peak in choppy trading as a sharp drop in Treasury yields weighed on the greenback as markets tempered bets on a rate hike by the Federal Reserve this month.

Dollar-rupee forward premiums rose to multi-year highs on Thursday after the central bank’s latest foreign exchange curbs rattled markets, sapping liquidity and making it difficult for traders to manage exposures, several bankers said.

India has used up about half of the more than $140 billion it mobilised through special measures to bolster its foreign exchange war chest earlier this year, highlighting pressure on the rupee and the central bank’s determination to turn the tide, according to estimates from economists and FX traders.

Data released on Thursday showed that India’s merchandise trade deficit stood at $30.21 billion in September, largely in line with economist expectations of $30.4 billion.