Rupee rises 48 paise to 94.95 against US dollar on easing oil concerns

The rupee appreciated 48 paise to close at 94.95 against the US dollar, supported by improved global risk sentiment, softer crude oil prices and a weaker dollar. Analysts said easing inflation concerns and foreign fund inflows also boosted the currency

Mumbai: The rupee appreciated 48 paise to close at 94.95 (provisional) against the US dollar on Tuesday, on improved global risk sentiments as higher traffic flows through the Strait of Hormuz reduced supply uncertainties.

Forex traders said market sentiment was also buoyed after Saudi Arabia slashed August crude oil prices for Asia by USD 11 per barrel.

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Moreover, softness in Brent oil prices will ease inflationary pressures for India, the world’s third-largest oil importer, market analysts said.

At the interbank foreign exchange market, the rupee opened at 95.33 and traded in the range of 94.94-95.37 in intraday trade. At the end of Tuesday’s trading session, the rupee was quoted at 94.95 (provisional), higher by 48 paise over its previous close.

On Monday, the rupee depreciated 25 paise to close at 95.43 against the US dollar. “The Indian rupee gained sharply today on improved global risk sentiments and a weak dollar. Softness in crude oil prices too supported the rupee as it is likely to ease inflationary pressure. Disappointing ISM services PMI too supported the rupee,” said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan. Choudhary further noted that “improved global risk sentiments on improved traffic in the Strait of Hormuz also supported the rupee. However, hedging demand from importers may cap sharp upside.

“Traders may take cues from weekly employment change data from the US. USD-INR spot price is expected to trade in a range of 94.60 to 95.30.” Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.96, up 0.11 per cent.

Brent crude, the global oil benchmark, was trading higher by 1.19 per cent at USD 72.85 per barrel in futures trade. On the domestic equity market front, Sensex declined 104.35 points to settle at 78,180.72, while the Nifty fell 31.65 points to close at 24,398.70.

Foreign institutional investors purchased equities worth Rs 243.03 crore on a net basis on Monday, according to exchange data.