Rupee ends lower at 88.63/$ as strong dollar offsets weak oil prices

Indian Rupee today: The domestic currency closed 7 paise lower at 88.63 against the greenback on Wednesday

The Indian Rupee weakened on Wednesday, erasing Tuesday’s gains from optimism over a potential US-India trade deal, as a stronger dollar index offset the impact of lower oil prices.

 

The domestic currency closed 7 paise lower at 88.63 against the greenback on Wednesday, according to Bloomberg. The Rupee has risen 0.14 per cent this month, while it has fallen 3.53 per cent this year, Asia’s second-worst performing currency.  

 

Rupee traded weakly in a muted session, remaining confined within a narrow range as traders awaited key economic cues, Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said. Market participants are now eyeing this week’s US CPI data, which is expected to provide fresh triggers for the dollar’s trajectory and, in turn, influence rupee movements, he added. "For now, the rupee is likely to remain range-bound, with an expected trading band between 88.40–88.85."

 

The rupee edged towards appreciation on Tuesday, lifted by optimism over trade negotiations with the US. President Donald Trump indicated on Wednesday that Washington and New Delhi are nearing a new trade agreement, adding that tariffs imposed on India may be lowered in due course. "We’re working on a deal with India, a very different one from before. They don’t love me right now, but they will again. We’re getting a fair deal," Trump said.

 

US President Donald Trump indicated on Wednesday that Washington and New Delhi are nearing a new trade agreement, adding that tariffs imposed on India may be lowered in due course. "We’re working on a deal with India, a very different one from before. They don’t love me right now, but they will again. We’re getting a fair deal," Trump said.

 

The positive tone from Trump offered a sense of relief and improved confidence, especially when paired with weaker U.S. economic data that pushed the dollar lower, Pabari said. 

 

The dollar Index posted modest gains on optimism that the US government shutdown will end soon. The muted gains also come after fresh figures showed that private employers cut jobs last month. The measure of the greenback against a basket of six major currencies was up 0.16 per cent at 99.60. 

 

In commodities, crude oil prices were lower ahead of the key reports from OPEC and the IEA. Brent crude price was down 0.83 per cent at 64.62 per barrel, while WTI crude prices were lower by 0.93 per cent at 60.48 per barrel, as of 3:40 PM IST.