Rupee slipped in early trade on Tuesday, dragged down by continuous demand for the US dollar and a rebound in crude oil prices. The currency opened at 95.43 against the US dollar in the interbank foreign exchange market, registering a fall of 17 paise from Monday’s closing level of 95.26. Rupee had ended the previous session 34 paise stronger after support from the
Reserve Bank of India through dollar sales helped the currency recover.
Market participants said that geopolitical developments continue to influence rupee’s movement, while liquidity measures and intervention by the RBI may help limit sharp fluctuations in the near term.
Crude oil prices edged higher after reports of fresh US attacks against Iran dampened expectations of progress towards reopening the Strait of Hormuz. Brent crude futures, which had earlier fallen on Monday, climbed 1.84% to $97.91 per barrel after touching the $93 per barrel mark.
Earlier, US President Donald Trump said that talks with Iran aimed at ending the war were moving “nicely”. However, officials indicated that reaching a final agreement could take time because of Tehran’s complex consultation process with its supreme leader.
“With RBI on the prowl the speculative pressure against the rupee has come down significantly and a better risk appetite in equities has kept rupee firmer against the dollar,” said Anil Kumar Bhansali Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
He added, “Reports on Monday evening indicated that US had launched fresh strikes against missile launch sites and mine laying boats taking oil a bit higher despite talks being held with Iranian authorities. This could complicate the ongoing peace negotiations.”
The dollar index, which tracks the movement of the US currency against six major peers, was trading 0.19% lower at 99.04.
Domestic equities also opened in the red, with the Sensex declining 264.82 points to 76,224.14, while the Nifty dropped 27.6 points to 24,004.10.
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Read MoreThe TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.
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