The Indian rupee weakened by 44 paise to close at 95.70 against the US dollar on Tuesday, pressured by renewed geopolitical tensions in West Asia, rising crude oil prices, and a stronger American currency, as reported by PTI.
Market Pressures on the Rupee
Forex traders noted that weak domestic equities also added pressure on the local currency. At the interbank foreign exchange market, the rupee opened at 95.43 against the US dollar and fluctuated between an intra-day high of 95.33 and a low of 95.76. The domestic currency had closed at 95.26 on Monday after gaining 34 paise, supported by RBI dollar sales that kept the rupee stable.
Analyst Insights
Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan, stated: "We expect the rupee to trade with a negative bias on uncertainty between the US and Iran and concerns over military action in the Middle East. However, softening of crude oil prices from higher levels may support the rupee at lower levels. USDINR spot price is expected to trade in a range of 95.20 to 95.85."
Global Factors
Forex traders said the rupee remains vulnerable to movements in crude oil prices and the strength of the dollar in global markets. The dollar index, which measures the greenback against a basket of six currencies, was trading 0.19 per cent lower at 99.05. Meanwhile, Brent crude, the global oil benchmark, rose 3.43 per cent to $99.94 a barrel in futures trade after reports of fresh US strikes against Iran offset hopes of progress in negotiations to reopen the Strait of Hormuz.
Domestic Equity Market
On the domestic equity front, the Sensex declined 479.26 points to settle at 76,009.70, while the Nifty fell 118 points to close at 23,913.70. Foreign institutional investors (FIIs) turned net buyers and purchased equities worth Rs 821.75 crore on Monday, according to exchange data.
