Indian Currency: According to foreign exchange traders, investors' confidence has increased after Trump's announcement in Davos to cancel the possible tariffs to be imposed on eight European countries regarding Greenland.

After a Trump statement and a subsequent decline, the rupee rose with enthusiasm, thoroughly 'washing' the dollar in the currency ring.

Dollar vs Rupee: Last year, the Indian rupee saw a sharp decline, and the start of the new year was not particularly favorable for the rupee. The rupee crossed a historic low of 91 against the US dollar. High tariffs imposed by the US and global uncertainties have kept investors apprehensive, further increasing the pressure on the rupee. However, a statement by US President Donald Trump has provided some relief to the Indian currency and signaled renewed enthusiasm in the market

Why did the rupee become excited?

Donald Trump has stated that the US will soon strike a major deal with India. He also clarified that he does not intend to impose any new tariffs on European countries regarding Greenland. This statement is being seen as a sign of easing geopolitical tensions, which has had a direct impact on the rupee and the stock market.

Following Trump's statement, the rupee opened 15 paise stronger at 91.50 per dollar in early trade on Thursday. This rise comes after the rupee had reached near its historic low just a day earlier. On Wednesday, the rupee fell by about 68 paise to 91.65, considered its all-time low. Global uncertainty and increased demand for the dollar were cited as the main reasons behind that decline.

According to forex traders, Trump's announcement in Davos that he would cancel potential tariffs on eight European countries regarding Greenland boosted investor confidence. Furthermore, a positive trend in domestic stock markets also supported the rupee, which gained strength in early trading.

stock market boom

The impact was clearly visible in the stock market as well. In early trading, the BSE Sensex rose 533.37 points to 82,443, while the NSE Nifty gained 157.20 points to trade at 25,314.70. Meanwhile, the dollar index, which measures the dollar's strength against six major currencies, rose 0.02 percent to 98.78. In the international market, Brent crude prices also rose 0.17 percent to $65.35 per barrel.

However, the sentiment among foreign institutional investors remains unconvincing. According to stock market data, foreign institutional investors were net sellers on Wednesday, selling shares worth ₹1,787.66 crore. Nevertheless, Trump's statement and signs of easing global tensions have provided some relief to the rupee and domestic markets.