Rupee Trades in Narrow Range Against US Dollar Amid Mixed Market Sentiment
The Indian rupee exhibited a cautious stance against the US dollar in early trade on Thursday, December 18, 2025, moving within a narrow range as market participants weighed mixed domestic and international factors. The intra-day movement reflected a tug-of-war between fresh foreign fund inflows providing support and uncertainties surrounding India-US trade negotiations alongside a generally risk-averse environment.
Exchange Rate Movements and Market Dynamics
At the interbank foreign exchange market, the rupee initially opened at 90.35 against the US dollar, gained some ground to touch 90.32, but also traded slightly weaker at 90.38 during the early session. This range-bound activity came in the context of the rupee’s recovery from an all-time low of 90.93 in preceding sessions, having closed Wednesday at 90.38 against the greenback, marking a 55 paise gain.
Forex analysts noted that while foreign institutional investors (FIIs) and domestic institutional investors (DIIs) demonstrated buying interest in equities, with FIIs purchasing shares worth ₹1,171.71 crore and DIIs acquiring ₹768.94 crore on a net basis on Wednesday, concerns lingered. A lack of significant progress in the ongoing India-US trade negotiations along with robust dollar demand from corporates and importers kept the rupee under pressure.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, indicated that public sector banks were active sellers of the US dollar on behalf of the Reserve Bank of India (RBI) the previous day, reportedly intervening to the tune of as much as $6 billion to stabilize the local currency. He projected the rupee to trade in the 90 to 91 range with support near 90.25 and resistance around 90.75. Global Indicators and Commodity Prices
The dollar index, which reflects the greenback’s strength against a basket of six major currencies, traded marginally higher by 0.05% at 98.41, lending mild support to the US currency. In addition, Brent crude oil futures edged up by 0.67% to $60.08 per barrel, which generally underpins the Indian currency given the country’s substantial oil import bill.
Domestic Equity Market Overview
The Indian stock market opened on a subdued note on Thursday, influenced by weak global cues and declining sectors such as automobiles and pharmaceuticals. The broader indices showed slight setbacks, with the Nifty Midcap 100 and the Nifty Smallcap 100 sliding 0.09% and 0.12% respectively in early trade.
Most sectoral indices remained in the red, barring the notable exceptions of Nifty IT, which gained 1.04%, and the Nifty PSU Bank index, which edged up 0.09%. The Nifty Auto sector led losses, falling over 1%, followed by declines in Nifty Pharma and Nifty Media indices.
Top individual stock performers included Wipro, which rose by 1.36%, Infosys with a 1.25% gain, and HCL Technologies, while laggards featured Sun Pharma (-2.19%), Mahindra & Mahindra (-1.57%), and Tata Motors PV (-1.49%).
Outlook
With ongoing global uncertainties and domestic trade negotiations remaining unresolved, the rupee is likely to continue exhibiting cautious movements in the near term. Market watchers will be paying close attention to further developments in trade talks, corporate dollar demand, and RBI interventions, which will collectively influence the trajectory of the rupee against the US dollar.
Investors are advised to stay informed on macroeconomic indicators and market trends to navigate the evolving currency and equity landscapes effectively.