Rupee rises 15 paise to 95.81 against US dollar as crude prices fall

The rupee strengthened 15 paise to close at 95.81 against the US dollar on Monday, supported by lower crude oil prices, improved global risk sentiment, positive domestic equities and softer US Treasury yields amid expectations of US-Iran diplomatic talks

Mumbai: The rupee appreciated 15 paise to close at 95.81 (provisional) against the US dollar on Monday as crude oil prices retreated from elevated levels on improved global risk sentiment amid expectations of diplomatic talks between the US and Iran.

Forex traders said the Indian rupee firmed on weak crude oil prices amid hopes of diplomatic talks between the US and Iran. Moreover, positive domestic markets and softening US Treasury yields also supported the local unit.

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At the interbank foreign exchange market, the rupee opened at 95.86 against the US dollar, then gained some ground and touched 95.72 against the American currency in intraday trade.

At the end of the trading session on Monday, the rupee settled at 95.81 (provisional) against the American currency, higher by 15 paise from its previous close.

On Friday, the rupee closed 7 paise lower at 95.96 against the US dollar.

“We expect the rupee to trade with a slight positive bias on falling crude oil prices from higher levels, as improved global risk sentiment amid expectations of diplomatic talks between the US and Iran.

“However, reports that Iran shot down a US drone in the Strait of Hormuz may again deteriorate risk sentiment. Expectations of an increase in supplies from Saudi Arabia may also pressurise crude oil prices, which may be supportive for the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

USD-INR spot price is expected to trade in a range of 95.55 to 96.05, Choudhary added.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.32, up 0.10 per cent.

Brent crude, the global oil benchmark, was trading 2.08 per cent lower at USD 101.71 per barrel in futures trade.

On the domestic equities market front, the Sensex jumped 564.03 points to settle at 74,858.99, while the Nifty rose 67.90 points to close at 23,414.30.

Foreign Institutional Investors (FIIs) bought equities worth Rs 599.54 crore on a net basis on Friday, according to exchange data.

Meanwhile, India’s forex reserves dropped by USD 4.924 billion to USD 780.782 billion during the week ended September 11 due to a fall in foreign currency and gold reserves, according to RBI data released on Friday.