The Indian rupee weakened by 18 paise to close at 95.34 against the US dollar on Thursday, July 2, 2026. The decline came despite an overnight drop in the US dollar, which followed less hawkish comments from Federal Reserve Chair Kevin Warsh, and a fall in global crude oil prices.
Rupee Opens Higher but Fails to Hold Gains
Forex traders noted that the rupee opened on a positive note, tracking the weakness in the US dollar. However, the local unit could not sustain the momentum and slipped into negative territory as the day progressed. The dollar index, which measures the greenback against a basket of six major currencies, edged lower after Warsh signaled a cautious approach to future rate hikes.
Crude Oil and Global Factors Weigh
A decline in crude oil prices typically supports the rupee, as India is a major importer of oil. However, other global factors, including persistent inflation concerns and geopolitical uncertainties, kept the rupee under pressure. The Reserve Bank of India's (RBI) intervention in the forex market was limited, allowing the rupee to find its own level.
Market Outlook
Analysts expect the rupee to remain range-bound in the near term, with support at 95.50 and resistance at 95.00. The focus will now shift to upcoming US economic data and any further commentary from Fed officials. According to PTI, the rupee's movement will also depend on the trend in domestic equity markets and foreign fund flows.
