Rupee Slips To 95.39 Against U.S. Dollar As Oil Prices Climb

The Indian rupee opened 10 paise lower at ₹95.39 against the U.S. dollar on Tuesday, August 11, compared with Monday’s close of ₹95.29, as elevated crude oil prices weighed on the currency amid uncertainty over U.S.-Iran discussions.

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Oil Prices Keep Pressure On Rupee

The rupee had ended the previous session at around ₹95.30 per dollar, compared with ₹95.2075 on Friday, as per Finrex. The currency traded within a relatively narrow range even as Brent crude moved towards $84 a barrel.

Higher crude oil prices can increase India’s import bill and raise demand for dollars from oil importers. The latest rise in the <gold/silver/crude> price has therefore remained a factor for the rupee as markets track developments around the Strait of Hormuz.

The rupee’s movement also remained influenced by activity from the Reserve Bank of India. State-run banks were reported to have sold dollars on behalf of the central bank, helping limit the currency’s decline.

Finrex said the rupee could remain around ₹95.37 in early trade as oil prices rise. It also noted that exporters yet to hedge their receipts could look to cover positions as the rupee approaches ₹95.50, while importers could continue to purchase dollars on dips.

Asian Currencies Mostly Gain

Asian currencies were largely stronger against the U.S. dollar during early trading. The Indonesian rupiah led the gains, rising 0.8%, followed by the South Korean won, which advanced 0.26%. The Japanese yen gained 0.09%, while the Thai baht was marginally higher by 0.01%.

The Chinese renminbi was unchanged. On the other hand, the Philippine peso declined 0.34%, while the Taiwan dollar, Malaysian ringgit and Singapore dollar fell 0.03%, 0.02% and 0.01%, respectively.

The mixed performance across Asian currencies came as investors assessed movements in the dollar and regional economic developments.

Dollar Awaits U.S. Inflation Data

The U.S. Dollar Index was steady near 99.8 after gaining 0.2% in the previous session. The dollar received support from a weaker yen and higher U.S. Treasury yields.

Markets are now awaiting U.S. inflation data for indications on the Federal Reserve’s interest-rate path. The data could influence expectations for future monetary policy and, in turn, the direction of the dollar against major currencies.

For the Indian currency, movements in crude oil, dollar demand and RBI activity remain key factors to watch during Tuesday’s session. The rupee’s opening at ₹95.39 follows a period of relatively contained trading, with the latest increase in the crude oil price adding fresh pressure at the start of trade.