The rupee pared initial losses and settled for the day on a positive note, higher by 23 paise at 94.26 (provisional) against the greenback on Thursday (May 7, 2026), as Brent crude and the U.S. dollar index retreated from their elevated levels.

Forex traders said Brent oil prices have fallen below $100 per barrel on a rise in investor risk appetite in global markets on hopes of peace between the U.S. and Iran.

However, factors such as unabated foreign capital outflows and safe-haven dollar demand from importers capped sharp gains for the rupee.

At the interbank foreign exchange market, the rupee witnessed high volatility. It opened at 94.77 against the U.S. dollar, registering a fall of 28 paise over its previous close.

In intraday trade, the USD/INR pair touched an intraday low of 94.90 and a high of 94.08 against the American currency.

The rupee finally settled at 94.26 (provisional), registering a rise of 23 paise over its previous close.

On Wednesday (May 6), the rupee appreciated 69 paise to close at 94.49 against the U.S. dollar.

“We expect the rupee to trade with a positive bias on improved global risk sentiments amid easing tensions between the U.S. and Iran and softening of global crude oil prices. A decline in the U.S. dollar may also support the rupee.

“However, dollar demand from importers and FII outflows may cap sharp gains. USD-INR spot price is expected to trade in a range of 93.80 to 94.40,” said Anuj Choudhary, Research analyst at Mirae Asset ShareKhan.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 97.86, down 0.16 per cent.

Brent crude, the global oil benchmark, was trading lower by 2.23% at $99.01 per barrel in futures trade.

On the domestic equity market front, Sensex declined 114 points to settle at 77,844.52, and the Nifty was down 4.30 points to 24,326.65.

Foreign Institutional Investors offloaded equities worth ₹5,834.90 crore on Wednesday, according to exchange data.

The rupee depreciated 8 paise to close at 89.53 (provisional) against the U.S. dollar on Monday (December 1, 2025), fuelled by strong market demand for the American currency.

Forex traders said the sustained weakness in the rupee is primarily attributable to a widening trade deficit, the delayed India-U.S. trade deal, and limited central bank intervention.

At the interbank foreign exchange market, the rupee opened at 89.45, then lost its ground and fell to a record low of 89.79 (provisional) against the U.S. dollar in intraday trade, down 34 paise over its previous close.

The unit earlier logged its lifetime intraday low at 89.66 against the U.S. dollar on November 21, when it had plunged 98 paise.

At the end of trade on Monday, the rupee settled at 89.53 (provisional) against the greenback, down eight paise over its previous close.

On Friday, the rupee dropped nine paise to settle at 89.45 against the U.S. dollar.

“The outlook for the rupee to remain under pressure versus the U.S. dollar for the coming days, as the underlying imbalance between demand and supply for the U.S. dollar is likely to persist,” said Dilip Parmar, Senior Research Analyst, HDFC Securities.

In the near term, spot USD-INR has resistance at 89.95 and support at 89.30, Mr. Parmar added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.17% higher at 99.28.

Brent crude, the global oil benchmark, rose 1.86 per cent to USD 63.55 per barrel in futures trade.

On the domestic equity market front, both benchmark indices, Sensex and Nifty, declined from their record highs. Sensex dipped 64.77 points to settle at 85,641.90, while Nifty slipped 27.20 points to 26,175.75.

Foreign institutional investors sold equities worth ₹3,795.72 crore on a net basis on Friday, according to exchange data.

On the domestic macroeconomic front, India’s manufacturing sector activity eased to a nine-month low in November, mainly owing to a softer rise in sales and production amid reports of challenging market conditions.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI), falling to 56.6 in November from 59.2 in October, highlighted the slowest improvement in operating conditions since February.

Forex traders said investors are adopting a cautious stance amid ongoing trade tensions with the U.S., with expectations of a settlement towards the end of the year.

On November 28, Commerce Secretary Rajesh Agrawal said India is hopeful of reaching a framework trade deal with the U.S. this year itself that should address the tariff issue to the benefit of Indian exporters.

Both countries have been in negotiations for a long time, and the first tranche of a bilateral trade deal was expected by the fall of 2025, but the Trump administration’s imposition of tariffs on Indian exports has created hurdles.