The Indian rupee strengthened at the opening on Tuesday, July 7, tracking gains in several Asian currencies and a weaker U.S. dollar. The domestic currency opened at 95.33 against the U.S. dollar, improving from its previous close of 95.40.

The early gains came as the dollar index remained below the 101 mark, offering support to emerging market currencies. Market participants, however, continued to watch global macroeconomic developments, with recent trading indicating that the rupee’s underlying momentum has softened compared with previous sessions.

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Softer Dollar Lends Support

According to Finrex, the rupee is expected to trade within the 95.20-95.70 range during the session. The advisory attributed the positive opening to weakness in the dollar index and firm performance across parts of the Asian currency market.

Finrex also noted that Saudi Arabia’s decision to reduce its official selling price for crude oil exports to Asia by $1.10 per barrel—the steepest reduction in 26 years—could provide additional support to the domestic currency by easing concerns around the crude price.

The advisory suggested that exporters could consider selling dollars around the 95.50 level, while importers may use any decline in the U.S. dollar to hedge near-term payment obligations.

Asian Currencies Show Mixed Performance

Asian currencies traded on a mixed note during early trade on Tuesday. The Philippine peso led regional gains with a rise of 0.11%, followed by the Malaysian ringgit, which advanced 0.09%. The Singapore dollar also edged 0.03% higher against the U.S. currency.

Among the weaker currencies, the Chinese renminbi declined 0.20%, while the Indonesian rupiah slipped 0.18%. The Thai baht lost 0.14%, and the Taiwan dollar eased 0.08%. The South Korean won and Japanese yen were largely unchanged, slipping marginally by 0.02% and 0.01%, respectively.

Dollar Index Remains Under Pressure

The U.S. dollar continued to trade on a weaker footing after investors reduced expectations of further interest rate increases following softer-than-expected U.S. employment data. Against a basket of major currencies, the dollar index was last quoted at 100.86.

The Japanese yen remained under pressure, trading above the 162-per-dollar mark in early Asian dealings. The currency also hovered near its weakest level against the British pound since 2007, although caution over the possibility of intervention by Japanese authorities limited sharper declines.

Currency markets are also monitoring the crude price, as energy costs often influence inflation expectations, trade balances and capital flows across emerging economies. With the dollar remaining under pressure and Asian currencies showing selective strength, the rupee is likely to continue taking cues from global currency movements, the crude price, and incoming U.S. economic data during the trading session.