Rupee rises 20 paise to close at 95.58 against US dollar
Forex traders said Brent crude oil prices witnessed a sharp decline after reports surfaced that Iran would open the Strait of Hormuz within seven days if the US lifts its port blockade and eases military pressure around it.
On Tuesday, the Indian rupee appreciated by 20 paise to close at 95.58 against the US dollar, according to provisional data. This rise was driven by a significant drop in crude oil prices, following reports that Iran would open the Strait of Hormuz if the US lifts its port blockade and eases military pressure. Forex traders noted that Brent crude oil prices plummeted after the Iran news broke.
The rupee opened at 95.75 against the US dollar on the interbank foreign exchange market before climbing to 95.55 in intraday trade. By the end of the trading day, the rupee settled at 95.58 against the American currency, up 20 paise from its previous close. On Monday, the rupee had increased by 18 paise to 95.78 against the US dollar.
Analyst Anuj Choudhary suggested that the rupee is likely to maintain a positive outlook due to improved global risk sentiments and hopes for diplomatic talks to resolve the US-Iran conflict. Falling crude oil prices and a weaker US dollar may further bolster the rupee. However, any new tensions could limit the currency's upside potential.
Traders are advised to watch the ADP weekly employment change data from the US. The dollar index, measuring the greenback's strength against six other currencies, stood at 100.34, down 0.08%. Brent crude, the global oil benchmark, fell by 1.14% to $99.20 per barrel in futures trade. On the domestic stock market, the Sensex fell 329.91 points to 74,529.08, while the Nifty dropped 85.30 points to 23,329.
Net equity offloads by foreign institutional investors amounted to Rs 576.20 crore on Monday. Government data released on Monday revealed that the output of India's nine key infrastructure sectors slowed to a three-month low of 4.8% in August, mainly due to lower production of coal, natural gas, crude oil, and fertilizers.
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