The Indian rupee is expected to trade in the range of Rs 90.40 to Rs 91.20 per US dollar next week. According to a report by Union Bank of India, sustained equity inflows could support the domestic currency. The report highlighted this range from a technical standpoint. Moreover, it stated that continued capital inflows may strengthen the rupee further.
Analysts indicated that sustained equity inflows could push the rupee toward Rs 90.10 per dollar. They identified Rs 90.40 per dollar as a key interim support level. At the same time, the report noted that the rupee may face strong resistance near Rs 90.90 per dollar. If the currency breaks above this zone, it could move toward Rs 91.20 per dollar.
Impact of India-US Trade Agreement
The report also referenced the finalisation of the India-US Bilateral Trade Agreement. According to analysts, the threshold for the rupee has shifted meaningfully after this development.
Therefore, the currency may respond positively to improved trade prospects. Furthermore, enhanced trade ties could attract additional foreign investment. Market participants believe that stable trade relations strengthen investor confidence. Consequently, this confidence may translate into supportive capital flows.
AI and Structural Support for Rupee
Beyond short-term technical levels, the report emphasised structural factors influencing the rupee. It highlighted the growing role of Artificial Intelligence in reshaping India’s services export landscape. Analysts stated that AI-led offerings could enhance India’s export competitiveness. In addition, digital and cloud-based services may generate higher-value exports.
These developments could increase US dollar inflows over time. Therefore, the report described AI-driven exports as a structural positive for the rupee. As India expands into advanced digital services, it may diversify export earnings. Consequently, this shift may provide long-term support to the domestic currency.
Near-Term Risks Remain
Despite these positives, the report cautioned about near-term risks. Analysts noted that transitions in traditional IT outsourcing models may create uncertainty. Such changes could weigh on earnings sentiment within the technology sector. Moreover, fluctuations in foreign portfolio investor flows may introduce volatility.
Therefore, while structural factors remain supportive, episodic currency swings cannot be ruled out. Global market developments may also influence short-term rupee movements.
Recent Stability Despite External Pressures
During the previous week, the rupee maintained a stable trajectory. It traded consistently within a narrow band of Rs 90.60 to Rs 90.70 per dollar. This stability persisted despite a widening trade deficit of USD 34.68 billion. Additionally, persistent foreign institutional investor outflows did not significantly weaken the currency. The report attributed this resilience to strong macroeconomic fundamentals. It also pointed to sustained investor confidence in India’s economic position.
Record-high foreign exchange reserves have provided an important buffer. According to the report, India’s forex reserves stand at USD 725.73 billion. These reserves help cushion the rupee against external shocks. Moreover, they strengthen market confidence during periods of volatility. Consequently, investors view India’s macroeconomic buffers as robust. This perception supports currency stability even amid global uncertainties.
Outlook for the Coming Week
Looking ahead, the report outlined a balanced outlook for the rupee. Sustained capital inflows and strong services exports may offer continued support. At the same time, global developments and sector-specific transitions may trigger short-term fluctuations. Therefore, traders may closely monitor technical resistance levels.
If the rupee holds above key support at Rs 90.40 per dollar, stability may continue. However, a break above Rs 90.90 could push the currency toward Rs 91.20. Overall, the report suggested that structural positives outweigh immediate concerns. Strong forex reserves, improving trade dynamics and AI-driven exports provide meaningful backing. Therefore, while volatility may arise periodically, the rupee appears positioned for relative stability in the near term.
