Rupee falls 15 paise to 94.48 against US dollar amid firm greenback
The rupee weakened by 15 paise to 94.48 against the US dollar in early trade on Monday as a stronger greenback and geopolitical tensions in the Middle East offset support from foreign inflows, while equity markets opened sharply higher.
Mumbai: The rupee depreciated 15 paise to 94.48 against the US dollar in early trade on Monday, weighed down by the strength of the American currency in the overseas market.
Forex traders said the rupee witnessed volatility as steady debt and deposit inflows pulled the domestic currency in one way, while a nervous Middle East and a firm dollar pulled it the other way.
At the interbank foreign exchange market the rupee opened at 94.42, registering a decline of 9 paise from its previous close.
In initial trade it also touched 94.24 against the American currency.
On Friday, the rupee pared most of its initial gains and settled higher by 7 paise at 94.33 against the US dollar.
“Technically, the 94.0-94.20 zone continues to act as a key support area, while 94.80-95.00 remains the immediate resistance band. With debt inflows showing signs of improvement and oil prices staying relatively contained, the bias remains mildly in favour of rupee appreciation, with USD/INR potentially drifting towards the 94.0-3.80 zone,” CR Forex Advisors MD – Amit Pabari said.
On the global front, high-level Iran war talks in Switzerland ended on Monday with lower-level talks planned for the rest of the week as Iran and the United States agreed to create a “de-confliction cell” to address the fighting in Lebanon.
The talks marked the start of a 60-day diplomatic process that seeks to reach a permanent deal to end the Iran war.
Meanwhile, Iran insisted it had again shut the Strait of Hormuz over the weekend, the narrow mouth of the Persian Gulf crucial to energy shipments, while the US said traffic continued.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 0.02 per cent up at 100.87, amid hawkish FED and the fragile US-Iran trade deal.
Brent crude, the global oil benchmark, was trading lower by 1.28 per cent at USD 79.54 per barrel in futures trade.
“Brent oil was very near to USD 79 per barrel as talks between US and Iran were progressing while Iran had closed the Strait of Hormuz,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
On the domestic equity market front, Sensex climbed 407.12 points to 77,210.02 in early trade, while the Nifty surged 114.75 points to 24,129.95.
Foreign institutional investors turned buyers on Friday, purchasing equities worth Rs 4,859.07 crore on a net basis, according to exchange data.
