Rupee Opens Stronger At 95.14 Against U.S. Dollar As Crude Price Declines

The Indian rupee opened 25 paise stronger at 95.14 per U.S. dollar on Monday, compared with Friday’s closing level of 95.39. The domestic currency benefited from lower international crude price levels and a softer U.S. dollar, while expectations of continued intervention by the Reserve Bank of India (RBI) also supported market sentiment.

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The rupee extended its recent gains after global oil prices retreated following developments in West Asia, easing pressure on India’s import bill.

Lower Oil Prices Support Domestic Currency

According to Finrex, the Indian rupee is expected to trade within the 95.00-95.50 range during the session. The research firm said Brent crude price declined to around $84 per barrel after U.S. President Donald Trump postponed military action against Iran, while the dollar index eased to 99.72, creating favourable conditions for the domestic currency.

Finrex added that exporters are likely to utilise intraday gains in the rupee to sell dollars, while importers may continue purchasing dollars on declines and hedge upcoming payment obligations.

Lower global crude price levels are generally viewed as supportive for the Indian rupee because they help reduce the country’s import costs, particularly for crude oil.

Asian Currencies Advance Against Dollar

Most Asian currencies traded higher against the U.S. dollar, reflecting broad-based weakness in the greenback.
The Japanese yen recorded the strongest appreciation, rising 0.723%, followed by the South Korean won at 0.669% and the Indonesian rupiah at 0.494%. The Philippine peso increased by 0.339% as the Thai baht and Singapore dollar recorded gains of 0.303% and 0.211%, respectively.

The Taiwan dollar rose by 0.105%, the Malaysian ringgit appreciated by 0.061%, and the Chinese renminbi was virtually flat at 0.006%.

Yen Remains In Focus

The Japanese yen remained under close watch after the U.S. dollar reversed its early gains during Asian trading.
The dollar declined 0.6% against the yen to an intraday low of 156.50 after Japan confirmed that it had conducted a coordinated yen-buying intervention with the United States on Friday. The move renewed attention on currency market intervention as authorities sought to support the Japanese currency.

Market Watches Global Cues

Currency markets are expected to continue tracking developments in global oil markets, central bank actions and movements in the U.S. dollar. A continued drop in the international crude rate is expected to be favorable to the rupee, while shifts in the global risk appetite and currency interventions by central banks will probably dictate trade during the upcoming sessions.

Meanwhile, a fall in oil rates along with a weak dollar and the support of the RBI has helped the Indian rupee start the week stronger.