Rupee snaps four-day fall amid dip in oil prices; opens at 86.25/$

Indian Rupee today: The domestic currency opened 5 paise higher at 86.25 against the dollar on Tuesday

The Indian Rupee saw marginal gains at open, a day after falling to the lowest in one month, amid a decline in crude oil prices. 

 

The domestic currency opened 5 paise higher at 86.25 against the dollar on Tuesday, according to Bloomberg. The rupee has witnessed nearly 0.79 per cent depreciation in the current calendar year. 

 

The rupee touched a recent low of 86.3625 on Monday but is expected to open slightly stronger at 86.21 today, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. 

 

Exporters who have not sold earlier can consider selling around 86.35-86.40, while Importers may wait for better levels to hedge but can purchase dollars for cash payments at the day's lowest point, Bhansali said. "Foreign portfolio investor (FPI) demand for dollars remains strong, while the Reserve Bank of India (RBI) is intervening at higher levels to support the rupee." 

 

Key economic indicators such as Manufacturing and Services PMI will be closely tracked by market participants, according to Jateen Trivedi, VP research analyst - commodity and currency at LKP Securities. "The rupee is likely to continue moving within the broader range of 85.50-86.50."

 

The currency fell for the fourth straight session on Monday due to sustained dollar demand from importers. Selling in equity markets also weighed on the currency. On Monday, FPIS sold equity worth ₹1,681.23 crore and has offloaded stocks worth ₹4,742 crore so far this month. 

 

Investors' focus will be on US Fed Chair Jerome Powell’s speech today, along with money supply data. 

 

On the tariff front, the next round of formal negotiations between India and the US has been pushed beyond the August 1 deadline amid continued uncertainty over an interim trade deal. Uncertainty over the eventual state of tariffs globally has been a huge overhang for the forex market, analysts said.   

 

After falling for five straight months, the dollar index has recovered 1.5 per cent in July on strong economic data and less probability of an immediate rate cut. The measure of the greenback against a basket of six major currencies was up 0.06 per cent at 97.91.

 

Meanwhile, oil prices fell as traders priced in little impact of European sanctions against Russia, while signs of a brewing US-EU trade conflict also weighed. Brent crude price was down 0.75 per cent at 68.69 per barrel, while WTI crude prices were lower by 0.76 per cent at 66.69, as of 9:10 AM IST.