Rupee gains 28 paise against US dollar as crude oil prices tumble and global sentiment improves

The rupee appreciated 28 paise against the US dollar in early Monday trade, supported by declining crude oil prices, easing geopolitical tensions in West Asia, a weaker dollar index and strong domestic equities, even as foreign institutional investors remained net sellers.

Mumbai: The rupee gained 28 paise to 96.25 against the US dollar in early trade on Monday, taking cues from a sharp fall in crude oil prices and positive global sentiment after the US and Iran signalled an easing of tensions in West Asia.

The American currency index also retreated from an elevated level, while domestic equities witnessed a strong buying trend, supporting the local currency further, forex traders said.

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At the interbank foreign exchange, the rupee opened at 96.18 but lost some ground to trade at 96.28 against the greenback, logging a gain of 28 paise from its previous closing level.

On Friday, the rupee recovered from a low level and settled 20 paise higher at 96.53 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading down 0.26 per cent at 101.04.

Brent crude, the global oil benchmark, was trading 4.17 per cent lower at USD 92.74 per barrel in futures trade.

Analysts attributed the recovery in crude prices to the easing of tensions in West Asia as the US and Iran paused strikes against each other.

US President Donald Trump is “giving talks some space”, Mike Waltz, the US ambassador to the United Nations, told Fox News.

“He’s giving it a little bit of room,” Waltz said, adding, “We’ve had both Oman and Iran, and a number of our other negotiators, engaged at every level, from the most senior levels all the way down to the technical level over the past few weeks, and particularly in the past few days.”

On the domestic equity market front, Sensex rose 613.80 points, or 0.81 per cent, to 76,673.57, while the Nifty climbed 165.40 points, or 0.70 per cent, to 23,931.55.

Foreign Institutional Investors offloaded equities worth Rs 3,892.77 crore on a net basis on Friday, according to exchange data.