Rupee Opens 11 Paise Higher As Lower Oil Prices Support Sentiment

The Indian rupee opened stronger on June 17, helped by a decline in crude oil prices and weakness in the U.S. dollar ahead of the Federal Reserve’s monetary policy announcement.

The domestic currency started the session at 94.45 against the U.S. dollar, gaining 11 paise from its previous close of 94.56. The move came as Brent crude slipped below the $80-per-barrel mark, easing pressure on oil-importing economies such as India.

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Softer Crude Oil Offers Support

Lower crude oil prices remained one of the key factors aiding the rupee in early trade. Brent crude, the global benchmark, stayed below $80 per barrel after recent declines in international energy markets.

A fall in crude prices generally reduces India’s import bill, supporting demand for the local currency. The decline also coincided with weakness in the U.S. Dollar Index, which hovered near 99.50 during Asian trading hours.

According to Finrex Treasury Advisors, the combination of softer oil prices and a weaker greenback is expected to provide near-term support to the rupee.

The advisory noted that exporters may use any rise in the USD/INR pair to hedge receivables, while importers could accumulate dollars on declines towards the 94.20 level.

Mixed Trend Across Asian Currencies

Asian currencies traded with mixed performance against the U.S. dollar on Wednesday. The Philippine peso emerged as the strongest performer in the region, rising 0.257%. The Japanese yen gained 0.037%, while the Chinese renminbi added 0.015%. The Singapore dollar also edged higher by 0.008%.

The South Korean won was the biggest loser among weaker currencies, dropping 0.313% against the U.S. currency. The Indonesian rupiah slipped 0.090%, while the Taiwan dollar lost 0.054%. The Thai baht and Malaysian ringgit remained largely unchanged, posting marginal declines.

Dollar Weakens Ahead Of Fed Decision

The U.S. dollar remained under pressure as investors awaited the Federal Reserve’s policy outcome, the first under Chair Kevin Warsh.

Market participants widely expect the central bank to leave interest rates unchanged. Attention is expected to remain on the accompanying policy statement and any indications regarding the future path of interest rates.

The euro held near $1.1611, while the British pound traded around $1.3430 during early Asian hours. Recent optimism surrounding an interim U.S.-Iran peace agreement has also supported risk appetite, reducing demand for traditional safe-haven assets, including the U.S. dollar.

Currency markets remained largely range-bound ahead of the Fed decision, with investors avoiding aggressive positions until greater clarity emerges from the central bank’s policy guidance.

The rupee’s direction through the remainder of the session is likely to be influenced by movements in crude oil prices, the dollar index and global market reaction to the Federal Reserve’s announcement later in the day.