Rupee surges 54 paise to settle at 95.99 against US dollar

Mumbai, Jul 27 (PTI) The rupee appreciated sharply by 54 paise to close at 95.99 against the US dollar on Monday, driven by a steep correction in crude oil prices after the US and Iran paused the war in West Asia, triggering hopes of easing global trade tensions.

According to forex traders, the local currency also found support from a firm trend in domestic equities and weakness in the US dollar against major currencies.

At the interbank foreign exchange, the rupee opened at 96.18 and touched the low of 96.27 and high of 95.78 against the greenback during the session. The local unit finally settled at 95.99 against the dollar, up 54 paise compared to its previous closing level.

On Friday, the rupee recovered from its record low levels to settle

20 paise higher at 96.53 against the US dollar. The rupee’s all-time low closing level of 96.86 was recorded on May 20.

Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said the rupee strengthened to its highest levels in three weeks as the US and Iran halted strikes after two weeks of escalation.

“Falling crude oil prices and softening of the US dollar also favoured the rupee. Reports of intervention by the RBI also supported the rupee,” Choudhary said, adding, “USD-INR spot price is expected to trade in a range of Rs 95.50 to Rs 96.20”.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.20 per cent lower at 101.09.

Brent crude, the global oil benchmark, declined 8.95 per cent to USD 88.12 per barrel in futures trade as the US and Iran halted attacks and hinted at moving on to a negotiation table.

US President Donald Trump is “giving talks some space”, Mike Waltz, the US ambassador to the United Nations, told a news channel.

“He’s giving it a little bit of room,” Waltz said, adding that “we’ve had both Oman and Iran, and a number of our other negotiators, engaged at every level, from the most senior levels all the way down to the technical level over the past few weeks, and particularly in the past few days.” On the domestic equity market front, Sensex surged 776.01 points, or 1.02 per cent, to settle at 76,835.78, while the Nifty gained 228.50 points, or 0.96 per cent, to 23,995.95.

Foreign Institutional Investors offloaded equities worth Rs 1,688.23 crore on a net basis on Monday, according to exchange data.

According to Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, the rupee was supported primarily by the more than 7 per cent decline in crude oil prices.

“Going forward, market participants will closely monitor FII flows, the US Federal Reserve’s policy decision, and further developments in the Middle East, as these will be the key drivers for the rupee. Technically, the rupee is expected to trade in the 95.70-96.25 range over the near term,” Trivedi said. PTI HVA BAL BAL