Rupee opens lower at 86.22/$, tracking Asian peers and firm dollar

Indian Rupee today: The domestic currency opened 7 paise lower at 86.22 against the dollar on Monday, according to Bloomberg

The Indian rupee posted a lower start to the week, tracking weakness in Asian peers against a firm dollar and a slight uptick in crude oil prices. 

 

The domestic currency opened 7 paise lower at 86.22 against the dollar on Monday, according to Bloomberg. The rupee has witnessed over 0.8 per cent depreciation in the current calendar year. 

 

The rupee has declined nearly 1 per cent over the past two weeks and is now trading close to its lowest level in almost a month as traders focus remains on a possible tariff deal with the US ahead of the August 1 deadline. 

 

   

The Indian rupee has shown weakness as the US dollar recovers, and it is expected to trade in the range of 85.90 to 86.40 with a downward bias, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. 

 

The trade deal with the US remains stalled due to unresolved issues around agriculture and automobiles, he noted. Markets will closely watch remarks from US Federal Reserve Chair Jerome Powell on Tuesday, especially after criticism from the US President over his reluctance to cut rates.  

 

In India, attention is also turning to the possibility of domestic rate cuts, following a sharper-than-expected decline in inflation to 2.1 per cent, a more than six-year low, Bhansali said. "The combination of falling inflation, surplus liquidity, and weak high-frequency data suggesting a potential economic slowdown is contributing to pressure on the rupee."

 

After falling for fice 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 down 0.02 per cent at 98.46. Key global events this week include a speech by US Fed Chair Powell and ECB President Lagarde on July 22. 

 

For the dollar-rupee pair, the 85.80 level is seen as support, while 86.40 acts as resistance, according to Kunal Sodhani, head of treasury at Shinhan Bank India.

 

Crude oil prices remained slightly higher as traders assessed the impact of new European sanctions on Russian oil supply. Brent crude price was up 0.10 per cent at 69.35 per barrel, while WTI crude prices were higher by 0.18 per cent at 67.46, as of 9:00 AM IST.