Rupee gains 3 paise to 95.70 against US dollar amid high crude prices
The rupee gained 3 paise to settle at 95.70 against the US dollar on Thursday as support from a weaker dollar was offset by elevated crude oil prices. Brent crude rose 2.22 per cent to USD 93.65 per barrel
Mumbai: The rupee pared initial gains and settled for the day with gains of just 3 paise at 95.70 against the US dollar on Thursday, as the support from the weaker dollar index was negated by elevated crude oil prices.
Forex traders said while a weaker US dollar eases some depreciation pressure on the domestic currency, crude oil hovering above USD 90 would continue to keep pressure on India’s import bill.
The dollar index fell to its lowest level since late May after the US Treasury announced that it would double its buyback operations for longer-dated Treasury bonds, pushing US long-term yields lower and reducing the dollar’s yield advantage.
At the interbank foreign exchange, the rupee opened at 95.57 against the greenback and traded in a range of 95.56-95.72 during the session. It eventually settled at 95.70 (provisional), higher by 3 paise from its previous close.
On Wednesday, the rupee stayed almost flat, ending just 1 paisa higher at 95.73 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 98.61, lower by 0.22 per cent.
Brent crude, the global oil benchmark, was trading higher by 2.22 per cent at USD 93.65 per barrel in futures trade.
According to Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, the rupee opened higher on weak dollar and positive domestic markets. However, rupee pared initial gains on rising crude oil prices.
“We expect the rupee to trade with a slight negative bias on renewed geopolitical tensions between the US and Iran after US President Donald Trump announced crushing economic sanctions against Iran.
“Rising crude oil prices and inflation worries may also drag the rupee lower. However, a falling the US dollar amid diminishing rate hike expectations may support the rupee at lower levels. Traders may take cues from weekly unemployment claims data from the US. USDINR spot price is expected to trade in a range of 95.50 to 96,” Choudhary said.
On the domestic market front, Sensex jumped 628.04 points to settle at 77,537.72, while the Nifty surged 153.55 points to 24,231.85.
Foreign institutional investors purchased equities worth Rs 407.99 crore on a net basis on Wednesday, according to exchange data.