Rupee gains 12 paise to 94.72 on softer crude, foreign inflows

The rupee appreciated 12 paise to 94.72 against the US dollar during morning trade on Tuesday, supported by easing global energy costs and continued foreign fund flows into Indian equities. At the interbank foreign exchange market, the rupee opened at 94.68 and peaked at 94.60 before settling at 94.72, marking a recovery from Monday's close of 94.84.

The currency's upward movement reflected two key factors: a decline in Brent crude futures, which slipped 0.01 per cent to USD 104.76 per barrel, and sustained interest from overseas investors in domestic stock markets. Lower crude prices typically support the rupee by reducing India's import costs and external pressure on foreign exchange reserves.

Despite the positive momentum, forex traders noted that strength in the US dollar limited rupee gains. The dollar index, which measures the greenback's performance against a basket of six major currencies, rose 0.03 per cent to 101.65, reflecting global caution ahead of crucial US midterm elections. This international uncertainty kept investors worldwide cautious, preventing more substantial appreciation in the Indian currency.

The rupee's performance this week contrasts with recent volatility, having lost 8 paise on Monday before recovering Tuesday's gains. Market participants remain focused on crude oil price movements and foreign fund flows as key drivers of rupee direction in the coming sessions.