The rupee closed with a decline against the dollar for the third consecutive day. On Wednesday, the rupee witnessed a fall of 39 paise and closed at 93.83 (provisional) against the US dollar. The reason for this was that the uncertainty surrounding the US-Iran peace talks ended the hopes of reducing conflict in West Asia and caused a huge surge in the prices of crude oil. Forex traders said that strong selling in the domestic stock markets and continuous outflow of foreign capital also put pressure on the Indian currency. Let us also tell you what kind of data is being seen in the currency market…
Rupee falls by 39 paise
The rupee opened at 93.69 at the interbank foreign currency market and fell to a low of 93.87 against the US dollar during the session. It reached close to the level of 94, which it had reached for the first time on March 23. The domestic currency finally closed at 93.83 (provisional) against the dollar, down 39 paise from its previous close. On Tuesday, the rupee fell 28 paise to close at 93.44 against the US dollar. A day before this, on Monday also it had fallen by 25 paise. This means that the rupee has fallen by 92 paise against the dollar in three consecutive days. Earlier in the last two sessions, the rupee had seen an increase of 47 paise.
Will the rupee cross 94?
Anuj Chaudhary, Research Analyst, Mirae Asset Sharekhan, said that the rupee fell due to the overnight rise in crude oil prices and uncertainty over the US-Iran talks. He further said that the rupee is expected to continue its downward trend amid the exit pressure from FIIs (Foreign Institutional Investors). However, the weakening of the US dollar may prevent a major fall in the rupee. USD-INR spot price is expected to remain in the range of Rs 93.60 to Rs 94.20.
stock market decline
- Meanwhile, the dollar index – which measures the US dollar’s strength against a basket of six currencies – fell 0.07 per cent to 98.15.
- Global oil benchmark Brent crude was trading at US $ 99.75 per barrel, up 1.29 percent in futures trade.
- In domestic equity markets, the 30-share Sensex fell 756.84 points or 0.95 per cent to 78,516.49, while the Nifty fell 198.50 points or 0.81 per cent to 24,378.10.
- According to exchange data, foreign institutional investors sold shares worth about Rs 1,918.99 crore on Tuesday.
Why did crude oil rise?
Analysts said crude oil prices surged after two ships were attacked in the Strait of Hormuz on Wednesday, further complicating efforts to end the war. These latest attacks come just days after the US seized an Iranian container ship. Meanwhile, US President Donald Trump has threatened that if no peace agreement is reached before the end of the two-week ceasefire deadline, he will bomb Iran. Trump has said that if the ceasefire ends without any agreement, he is ready to attack Iran again. “I think I’m going to bomb because I think that’s the best approach going forward,” he told CNBC’s ‘Squawk Box.’
