Softer dollar and modest inflows provide breathing space for the Indian rupee

The Indian rupee was little changed on Wednesday as generally softer dollar and greenback selling from foreign banks gave the currency some breathing space north of the psychologically important 91 per dollar mark. The rupee was at 90.92 per dollar at 10:30 am IST, slightly above Tuesday’s close of 90.95.

A series of contract maturities in the non-deliverable futures market this week is a sore point for the rupee after it exerted pressure in the past two sessions.

That day, however, traders pointed to modest dollar inflows and a recovery in local stocks, providing some relief for the currency.

India’s stock indices, the BSE Sensex and Nifty 50, rose about 1% each, led by IT stocks, which rose more than 2.5% after a steep sell-off in recent sessions.

IT stocks weigh about 11% in the Nifty 50 index, the second highest.

Stocks in Asia were also higher, with MSCI’s regional stock index rising more than 1.5%, following a rally on Wall Street overnight on renewed enthusiasm that AI would boost profits for companies. Meanwhile, the focus was on the takeaways from US President Donald Trump’s State of the Union address, in which he briefly laid out his case for a possible attack on Iran, while making little mention of his signature tariff policy recently overturned by the US Supreme Court.

“Global trade uncertainty is expected to remain a medium-term structural feature as the Trump administration focuses on rebuilding tariff barriers through slower but more legally defensible channels,” MUFG said in a note.