Rupee weakens for third day on Iran-Israel conflict; opens lower at 86.53/$

Indian Rupee today: The domestic currency depreciated 6 paise to open at 86.53 against the dollar, the lowest level since April 9 this year

The Indian Rupee fell for the third consecutive session as tensions in West Asia and the US Federal Reserve Chair's warning of more inflation ahead weighed on the currency. 

 

The domestic currency depreciated 6 paise to open at 86.53 against the dollar, the lowest level since April 9 this year, according to Bloomberg. The currency has fallen by 1.13 per cent so far this month. 

 

The Indian rupee, which closed lower yesterday, is likely to open flat as demand for the US dollar from oil importers and foreign portfolio investors remains elevated, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. "The Reserve Bank of India (RBI) was seen selling dollars at 85.35 and later at 85.55 to curb volatility." 

 

With uncertainty persisting, the rupee may stay under pressure in the coming days, Bhansali said. "For the day, the expected trading range is between 86.25 and 86.75, with focus on developments in the Middle East and on the trade front."

 

Risk-off sentiment among traders persisted as tensions in West Asia flared and Federal Reserve Chair Jerome Powell's warning about potential inflation ahead.  

 

As missile exchanges between Iran and Israel continued, Iranian Supreme Leader Ayatollah Ali Khamenei rejected US President Donald Trump’s calls for unconditional surrender. “The Americans should know that any US military intervention will undoubtedly be accompanied by irreparable damage,” Khamenei warned.

 

Trump, meanwhile, said on Wednesday that his patience with Iran had run out, with Bloomberg reporting that US officials are preparing for a possible strike on Iran in the coming days. Crude oil prices remained volatile after these developments. Brent crude price was down 0.37 per cent at $76.42 per barrel, while WTI crude prices were lower by 0.19 per cent at 75.00, as of 9:08 AM IST. 

 

Meanwhile, the Fed left rates unchanged and downgraded its growth estimates while projecting higher inflation. “The cost of the tariff has to be paid, and some of it will fall on the end consumer,” Powell said. The dollar index, which measures the greenback against a basket of six major currencies, was up 0.14 per cent at 99.04. 

 

"The currency is expected to remain volatile in the range of 85.75 to 86.85, with global risk factors and trade uncertainties exerting pressure," according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. However, strength in domestic business activity and expectations of a good monsoon could offer stability to the rupee, he added.