Rupee rises 3 paise to close at 95.33 against US dollar
The rupee settled just 3 paise higher at 95.33 (provisional) against the US dollar on Wednesday, as hopes of a quick US-Iran agreement and reopening of the Strait of Hormuz faded.
Forex traders said Brent crude is moving towards $90 per barrel amid risk aversion in global markets.
At the interbank foreign exchange, the rupee opened at 95.40 against the greenback and traded in a range of 95.24-95.43 during the session. It eventually settled at 95.33 (provisional), higher by 3 paise from its previous close.
On Tuesday, the rupee declined 6 paise to settle at 95.36 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.85, up 0.03 per cent, largely on the back of oil-related uncertainty.
Brent crude, the global oil benchmark, was trading higher by 0.07 per cent at $88.97 per barrel in futures trade.
According to traders, the US CPI print is a key factor for the USD/INR pair.
A hotter-than-expected CPI would strengthen expectations of a September Fed rate hike, pushing yields and the dollar higher.
“This could put further pressure on the rupee, while a softer reading could ease rate-hike expectations and support the rupee,” CR Forex Advisors MD- Amit Pabari said.
On the domestic equity market front, Sensex declined 187.90 points to settle at 77,966.35, while Nifty dipped 35.75 points to 24,435.95.
Foreign institutional investors purchased equities worth Rs 258.55 crore on a net basis on Tuesday, according to exchange data.
Meanwhile, Fitch Ratings on Tuesday retained India’s sovereign credit rating at ‘BBB-’ for the 20th year in a row, but flagged risks of pressure on fiscal spending amid youth protest over jobs.
Fitch said despite headwinds from the energy shock due to the West Asia conflict, India’s economy remains strong with robust growth outlook and solid external finance fundamentals.
