Rupee strengthens to near 95.35 as RBI support and FPI inflows offset oil and geopolitics

Mumbai: The Indian rupee weakened by 11 paise to 95.84 against the US dollar in early trade on Thursday, September 24, as a stronger greenback, elevated crude oil prices and falling domestic shares weighed on the currency.At the interbank foreign exchange market, the rupee opened at 95.84 and remained at that level in initial deals. It had closed at 95.73 on Wednesday, when it also lost 11 paise.Dollar and crude weigh on rupeeThe dollar index, which measures the US currency against six peers, rose 0.06% to 100.87. Higher US bond yields added to the dollar’s strength and reduced the appeal of emerging market currencies.Sensex And Nifty Open In The Red, Rising Global Bond Yields Weigh On Indian Stocks Brent crude futures were down 0.97% at $102.08 a barrel. Despite the daily decline, oil remained well above the roughly $72 level seen in late February, before the Iran war.For India, which imports much of its oil, sustained high crude prices can increase demand for dollars from importers and put pressure on the rupee.Forex traders said foreign capital inflows offered little support as domestic equities declined. Analysts also pointed to uncertainty over West Asia diplomacy after US and Iranian officials met on the sidelines of the UN General Assembly.Stocks fall despite foreign buyingThe Sensex fell 506.43 points, or 0.68%, to 74,321.82 in early trade. The Nifty declined 181 points, or 0.77%, to 23,266.15, adding to pressure on the currency.Falling Crude Brings Relief To Indian Equities, Sensex And Nifty Open Higher As Oil Slips Below $100 Foreign institutional investors had been net buyers of Indian equities on Wednesday, purchasing shares worth ₹1,617.45 crore, according to exchange data. That inflow, however, did not prevent the rupee from slipping against the dollar on Thursday morning.Traders will continue to watch oil prices, US bond yields and the dollar for cues on the currency’s direction. Developments in West Asia could also influence demand for crude and the greenback in coming sessions.

The rupee is ⁠expected to open around 95.85-95.87 per dollar, traders said, down from its close at 95.74 in the previous session

On September 23, the Indian rupee ended weaker at 95.74 against the dollar amid global financial trends. Expectations of further US Federal Reserve rate hikes have increased the strength of the dollar. Asian currencies also experienced declines, with some falling 0.3%. Despite this, state-run banks helped limit the rupee's losses through dollar sales.

Mumbai: The Indian rupee appreciated 5 paise to 95.57 against the US dollar in early trade on Wednesday, supported by softer crude oil prices and a recovery across Asian currencies.At the interbank foreign exchange market, the rupee opened at 95.58 before strengthening to 95.57 against the American currency. The movement represented a gain of 5 paise from Tuesday’s closing level of 95.62.Falling Crude Brings Relief To Indian Equities, Sensex And Nifty End Slightly Higher As Oil Breaks $100 Forex traders said the currency’s near-term direction would largely depend on geopolitical developments, global risk sentiment and movements in energy prices.Crude Oil Provides Key SupportBrent crude futures declined 0.99 per cent to $98.27 per barrel, offering relief to the rupee and India’s broader macroeconomic outlook. Lower oil prices can reduce pressure on the country’s import bill and demand for dollars.However, the firm US currency following the Federal Reserve’s interest rate increase and foreign portfolio investor selling limited the rupee’s gains.The dollar index, which measures the greenback against a basket of six currencies, rose 0.10 per cent to 100.70.Key Dollar-Rupee LevelsAnindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, identified 96.30 as an upper barrier for the dollar-rupee pair.Rupee Stages An Early Recovery, Climbs 13 Paise To 95.65 Against The US Dollar He expects strong Reserve Bank of India intervention as the pair approaches the 96.30–96.50 region. Immediate rupee support is placed at 95.50, followed by the 95 level.Domestic Equities Trade HigherPositive equity market sentiment offered additional support to the domestic currency. The BSE Sensex climbed 283.66 points to 74,812.74 in early trade, while the NSE Nifty advanced 85.55 points to 23,414.55.Nevertheless, sustained foreign fund outflows remained a concern. Foreign institutional investors sold Indian equities worth ₹3,809.99 crore on a net basis on Tuesday.Traders will now monitor crude oil, the dollar index, geopolitical developments and RBI activity for signals on the rupee’s next move.

Brent crude, the global oil benchmark, was trading lower by 1.14% at $99.20 per barrel in futures trade

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.