Rupee rises 3 paise to close at 95.33 against US dollar

On Wednesday, the Indian rupee ended the day at 95.33 against the US dollar, marking a gain of just 3 paise. This upward movement was driven by optimism surrounding a potential swift resolution to the US-Iran conflict and the prospect of reopening the Strait of Hormuz. Forex traders noted that Brent crude oil prices were edging closer to $90 per barrel, as global markets exhibited risk aversion.

At the interbank foreign exchange market, the rupee opened at 95.40 and fluctuated between 95.24 and 95.43 throughout the day. By the end of the session, it settled at 95.33, a 3 paise increase from its prior closing rate. On Tuesday, the rupee had slipped by 6 paise, settling at 95.36 against the greenback.

The US dollar index, which measures the dollar's strength against a basket of six currencies, remained relatively stable at 99.85, up 0.03 percent. This surge was largely attributed to uncertainty stemming from oil-related factors. Brent crude, the global oil benchmark, saw a 0.07 percent increase, trading at $88.97 per barrel.

Experts attributed this dollar strength to the impact of the US Consumer Price Index (CPI) release. A higher-than-anticipated CPI reading would likely bolster expectations of a September Federal Reserve rate hike, consequently driving yields and the dollar higher. Conversely, a softer reading could ease rate-hike expectations, providing support to the rupee.

On the domestic stock market, the Sensex fell 187.90 points, settling at 77,966.35, while the Nifty declined 35.75 points, closing at 24,435.95. Foreign institutional investors contributed to this trend by investing a net amount of ₹258.55 crore in equities on Tuesday.

Fitch Ratings maintained India's sovereign credit rating at BBB- for the 20th consecutive year, but cautioned about potential pressures on fiscal spending amid youth protests over job opportunities. Despite concerns over the energy crisis due to the West Asia conflict, the country's economy was deemed robust, with a promising growth outlook and solid external finance fundamentals.