Rupee Breaks Four-Day Losing Streak, Settles at 90.18 Against US Dollar
Reuters
The Indian rupee snapped its four-day losing streak on Tuesday, January 6, 2026, appreciating 12 paise to settle at 90.18 (provisional) against the US dollar. The recovery came largely on the back of a decline in the US dollar index, which weakened following disappointing American economic data.
At the interbank foreign exchange market, the rupee opened at 90.22 and moved within a narrow range of 90.08 to 90.25 during the session before closing higher. On the previous trading day, Monday, January 5, the domestic currency had ended 10 paise lower at 90.30, reflecting sustained pressure from global cues.
Key Market Drivers
Forex traders said the rupee found some support from a softer dollar, even as multiple headwinds prevented a sharper appreciation. The US dollar index, which measures the greenback’s strength against a basket of six major currencies, slipped 0.06% to 98.21. The decline followed the release of the US ISM Manufacturing PMI, which came in below market expectations, raising concerns about the strength of the American economy.
However, traders cautioned that weak domestic equity markets, rising crude oil prices, and geopolitical tensions continued to cap gains for the rupee. Tensions between the United States and Venezuela contributed to global risk aversion, impacting emerging market currencies, including the rupee.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee is likely to trade with a negative bias in the near term due to global uncertainties. He pointed out that surging crude oil prices and foreign institutional investor (FII) outflows could add further pressure on the domestic currency.
Impact Analysis
Brent crude oil, the global benchmark, rose 0.47% to $62.05 per barrel in futures trade, increasing concerns for India, which imports a majority of its oil requirements. Higher crude prices typically weigh on the rupee by widening the current account deficit and increasing dollar demand from oil importers.
On the equity front, domestic markets remained under pressure. The BSE Sensex fell 376.28 points to close at 85,063.34, while the Nifty declined 71.60 points to 26,178.70. Persistent selling by foreign investors further dampened sentiment, with FIIs offloading equities worth ₹36.25 crore on Monday, according to exchange data.
Despite these pressures, market participants noted that possible intervention by the Reserve Bank of India (RBI) at lower levels, coupled with a weak dollar environment, could offer support to the rupee and limit downside risks.
Domestic Economic Signals
Adding to the cautious sentiment was data from the services sector, which showed a moderation in growth momentum. According to a monthly survey released on Tuesday, India’s services sector growth slowed in December, with new business inflows and output expanding at their slowest pace in 11 months.
The seasonally adjusted HSBC India Services PMI Business Activity Index declined from 59.8 in November to 58.0 in December, marking the weakest expansion since January 2025. Although the index remains well above the 50-mark that separates expansion from contraction, the easing trend suggests some cooling in economic activity. The survey also noted that companies were reluctant to hire additional staff, reflecting caution about future demand conditions.
Future Outlook
Market experts believe the rupee’s near-term trajectory will be guided by a combination of global risk sentiment, crude oil movements, and capital flows. While a weaker dollar and RBI’s presence in the forex market may provide intermittent relief, sustained geopolitical tensions and volatile global markets could keep the currency under pressure.
Traders are also closely watching upcoming global macroeconomic data and policy signals from major central banks, which could influence dollar movement and risk appetite across emerging markets.
Final Thoughts from TheTrendingPeople.com
The rupee’s modest recovery after four straight sessions of decline highlights the fragile balance between supportive and adverse global factors. While a softer dollar has offered temporary relief, persistent challenges such as geopolitical risks, rising crude prices, and FII outflows continue to pose risks. Going forward, the rupee’s stability will depend on how effectively domestic fundamentals counter external uncertainties