Rupee extends winning streak to five sessions on softer crude, dollar

The rupee extended its rally against the dollar on Thursday, marking its fifth straight session of gains as external headwinds continued to ease. The domestic currency settled at 95.06 per dollar, reflecting broader weakness in the greenback and declining crude oil valuations that have supported emerging market currencies in recent days.

Weaker international crude prices have provided relief to India's external account, as lower energy import costs reduce demand for dollars in the foreign exchange market. Simultaneously, a pullback in US Treasury yields has dimmed the appeal of dollar-denominated assets, encouraging investors to rotate into emerging market currencies including the rupee.

Forward premiums in the rupee market surged during the session, with traders unwinding foreign exchange derivative positions amid the currency's strength. Such activity typically signals shifting sentiment among market participants betting on the rupee's continued appreciation in the near term.

Analysts attributed the rupee's resilience to the confluence of supportive factors, though they cautioned that external vulnerabilities remain. The currency's performance will likely remain sensitive to movements in global crude prices, US interest rate expectations, and broader dollar strength in coming sessions.