Rupee Gains 20 Paise Against Dollar
On Tuesday, the Indian rupee saw a gain of 20 paise, closing at 95.58 against the US dollar, driven by a significant decline in crude oil prices and an improvement in global risk sentiment.
In the interbank foreign exchange market, the rupee started the day at 95.75 against the American currency and fluctuated to a low of 95.55 during the day before settling at 95.58, marking a 20-paise increase from its previous close. This upward movement was reportedly triggered by news that Iran might reopen the Strait of Hormuz within a week if the US were to lift its blockade and reduce military pressure.
Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, commented, “Indian rupee gained on sharp fall in crude oil prices on media reports that Iran would open the Strait of Hormuz within 7 days if the US lifts its port blockade and eases military pressure around it.” The dollar index, which measures the US currency’s strength against a basket of six currencies, was down 0.08% at 100.34, while US Treasury yields also fell from their previous highs.
Choudhary further noted that the rupee is expected to trade with a positive bias on improved global risk sentiments and hopes of diplomatic talks to resolve the US-Iran war. According to him, the decline in crude oil prices and the US dollar could support the rupee, although any new tensions might limit its upward movement. Traders are likely to watch the ADP weekly employment change data from the US, with the USD-INR spot price expected to range between 95.30 and 95.80.
Meanwhile, the domestic equities market experienced a downturn, with the Sensex dropping 329.91 points to 74,529.08 and the Nifty falling 85.30 points to 23,329. On Monday, Foreign Institutional Investors (FIIs) sold equities worth ₹576.20 crore on a net basis. Government data released on Monday showed that the output of the country’s nine key infrastructure sectors slowed to 4.8% in August, a three-month low, due to decreased production of coal, natural gas, crude oil, and fertiliser, compared to a 6.2% expansion in the same month last year and 5% in July this year.
