Rupee Opens Slightly Higher At 95.40 Per Dollar; Crude Near $90 Keeps Pressure On Currency

The rupee opened 4 paise higher at 95.40 against the U.S. dollar on Wednesday, compared with Tuesday’s close of 95.44. The modest gain came as Brent crude moved close to $90 a barrel, while most Asian currencies started the session weaker against the dollar.

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Crude Price And Asian Currency Moves

The Brent crude price remained a key factor for the rupee, with higher oil costs increasing demand for dollars from Indian oil importers. Finrex said the rupee could face pressure around 95.50 per dollar if crude remains elevated, with 95.80-96.00 seen as the next levels to watch.

Finrex said oil companies continued to purchase dollars for their regular requirements, while the Reserve Bank of India was supporting the rupee at different levels. It also said exporter dollar sales could emerge around 95.50, while importers were expected to continue buying dollars on declines.

Asian currencies were largely weaker against the U.S. dollar at the start of Wednesday’s session. The Indonesian rupiah fell 0.59%, followed by the Philippine peso, which declined 0.15%, and the Thai baht, which slipped 0.10%. The South Korean won, Japanese yen and Singapore dollar also recorded marginal declines.

The Taiwan dollar, Chinese renminbi and Malaysian ringgit moved higher by up to 0.07%.

Dollar Holds Steady

The U.S. dollar traded largely sideways during early Asian trading on Wednesday. Currency markets remained focused on upcoming inflation data, while fresh attacks affecting shipping routes in the Middle East added another factor for investors to assess.

For the Indian currency, movements in crude remain important because India imports more than 85% of its crude oil requirements. A higher crude price can increase dollar demand from oil companies and put pressure on the rupee.

The rupee is likely to remain sensitive to movements in Brent crude, Asian currencies and dollar demand from oil companies during the session. RBI intervention is also likely to play a key role in curbing any sharp movements in the currency.