Rupee Holds Near 94.35 Against Dollar As Softer Crude Prices Offset Dollar Strength

The rupee opened almost unchanged against the U.S. dollar on Monday, with easing crude oil prices helping contain pressure from a firm greenback and subdued regional currencies. The domestic currency began trade at 94.35 per dollar, marginally stronger than Friday’s close of 94.33.

The currency market remained balanced as lower oil prices improved sentiment, while demand for dollars from importers and strength in the dollar index restricted further gains. Market participants are also monitoring developments around the U.S.-Iran negotiations, which have influenced commodity prices and broader risk sentiment.

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Dollar Strength Caps Gains

According to Finrex, the dollar index climbed to 100.81, even as Brent crude slipped to around $79 a barrel. The brokerage expects the rupee to remain within a range seen in the previous session, with flows from exporters, importers, oil marketing companies, foreign portfolio investors and Reserve Bank of India interventions likely to offset one another.

Finrex said exporters could use levels around 94.50 and above to sell dollars, while importers may consider purchases near 94.20.

The rupee had settled at 94.33 on Friday after witnessing limited movement through the session. Despite fluctuations in the dollar index over recent weeks, improving foreign inflows and relatively softer energy prices have helped prevent sharper depreciation in the local currency.

Asian Currencies Trade Lower

Most Asian currencies weakened against the U.S. dollar on Monday. The Japanese yen declined 0.12%, while the Chinese renminbi fell 0.11%.

The South Korean won, Malaysian ringgit, Taiwanese dollar, Indonesian rupiah, Philippine peso and Singapore dollar posted losses ranging between 0.03% and 0.10%. The Thai baht stood out with a gain of 0.22%, making it the only major regional currency in positive territory.

Oil Market Developments Remain Key

Currency markets continue to track geopolitical developments in West Asia closely. Although negotiations between the U.S. and Iran have shown signs of progress, uncertainty persists after comments from U.S. President Donald Trump and reports from Tehran regarding the Strait of Hormuz.

Oil prices had eased from recent highs, providing some relief to import-dependent economies such as India. Lower crude oil prices generally support the rupee by reducing pressure on the country’s import bill.

For now, the domestic currency is likely to remain sensitive to movements in crude oil, dollar demand and overseas fund flows as markets assess developments on the geopolitical front.