Mumbai: The rupee depreciated 47 paise to close at 95.73 (provisional) against the US dollar Tuesday, on renewed geopolitical tensions in West Asia and a rise in crude oil prices.
Forex traders said a strong US dollar and weak domestic markets also pressured the rupee.
At the interbank foreign exchange market, the rupee opened at 95.43 against the US dollar, and touched an intra-day high of 95.33 and a low of 95.76 against the American currency.
At the end of Tuesday’s close, the rupee was quoted at 95.73 (provisional), down 47 paise from its previous closing.
On Monday, the rupee gained 34 paise to close at 95.26 against the US dollar with the RBI selling dollars and keeping the rupee well bid at all upper levels.
“We expect the rupee to trade with a negative bias on uncertainty between the US and Iran and concerns over military action in the Middle East.
“However, softening of crude oil prices from higher levels may support the rupee at lower levels. USDINR spot price is expected to trade in a range of 95.20 to 95.85,” said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.
Forex traders said the rupee remains vulnerable to rising crude oil prices and the strength of the American currency in the overseas market.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.05, down 0.19 per cent.
Brent crude, the global oil benchmark, was trading up 3.43 per cent at USD 99.94 per barrel in futures trade after reports that the US had carried out fresh attacks against Iran, offsetting hopes of a deal to reopen the Strait of Hormuz.
US President Donald Trump on Monday said negotiations with Iran to end the war were progressing “nicely”, but officials pointed out that a final decision may take some time due to the complex communication networks Tehran deploys to consult with its supreme leader.
On the domestic equity market front, Sensex dropped 479.26 points to settle at 76,009.70, while the Nifty declined 118 points to 23,913.70.
Foreign institutional investors turned net buyers and purchased equities worth Rs 821.75 crore on Monday, according to exchange data.
PTI
