Rupee jumps 61 paise against US dollar as crude oil prices fall

The rupee appreciated 61 paise to close at 95.92 against the US dollar, supported by a sharp fall in crude oil prices, easing geopolitical tensions, a stronger domestic equity market and weakness in the US dollar, according to forex traders

Mumbai: The rupee appreciated sharply by 61 paise to close at 95.92 (provisional) against the US dollar on Monday, driven by a steep correction in crude oil prices after the US and Iran paused hostilities in West Asia, raising hopes of easing global trade tensions.

According to forex traders, the local currency also found support from a firm trend in domestic equities and weakness in the US dollar against major currencies.

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At the interbank foreign exchange market, the rupee opened at 96.18 and touched a low of 96.27 and a high of 95.78 against the greenback during the session. The local unit finally settled at 95.92 (provisional) against the dollar, up 61 paise from its previous closing level.

On Friday, the rupee recovered from its record low to settle 20 paise higher at 96.53 against the US dollar. The rupee’s all-time low closing level of 96.86 was recorded on May 20.

Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan, said the rupee strengthened to its highest level in three weeks as the US and Iran halted strikes after two weeks of escalation.

“Falling crude oil prices and a weaker US dollar also supported the rupee. Reports of intervention by the RBI also supported the rupee,” Choudhary said.

He added, “USD-INR spot price is expected to trade in the range of Rs 95.50 to Rs 96.20.”

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.20 per cent lower at 101.09.

Brent crude, the global oil benchmark, declined 8.95 per cent to USD 88.12 per barrel in futures trade as the US and Iran halted attacks and indicated a willingness to return to negotiations.

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

“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, the Sensex surged 776.01 points, or 1.02 per cent, to settle at 76,835.78, while the Nifty gained 228.50 points, or 0.96 per cent, to close at 23,995.95.

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