Rupee Steady Despite Dollar Slide, Yuan Gains

The Indian rupee is expected to open in a narrow 90.72–90.76 range against the U.S. dollar on Tuesday, reflecting a muted response to the dollar’s weakness and yuan strength. On Monday, the rupee settled slightly lower at 90.7575, weighed down by corporate hedging and routine local flows, despite a struggling dollar. Traders expect the 90–91 range to remain intact, with little likelihood of a sustained move below 90.

Equity flows provided a positive offset, with foreign investors purchasing around $250 million of Indian shares on Monday, raising total February inflows to roughly $1.5 billion. This is a notable turnaround from January’s $4 billion outflow, suggesting cautious optimism in the market.

Global currency movements also influenced sentiment, as the dollar index fell 0.76% on Monday amid strength in the yuan and Japanese yen. The offshore yuan reached 6.9050 per dollar, its highest in over two years. Market participants are now eyeing upcoming U.S. employment and consumer price data, which were delayed by a recent federal shutdown.

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