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Rupee opens weaker at 95.39 per dollar as oil prices rise

The rupee was held to a narrow 95.10 to 95.30 range over the prior three sessions, helped by Reserve Bank of India dollar sales near 95.25, even as higher oil prices and US-Iran tensions weighed on sentiment.

Reported · Written up by our desk · EM Currencies

The Indian rupee opened 9 paise lower at 95.39 per US dollar on Tuesday, 11 August, as higher oil prices added pressure while US-Iran peace talks appeared stalled, according to LiveMint Markets.

Traders are watching the Reserve Bank of India for further intervention. The rupee had traded in a narrow 95.10 to 95.30 range over the past three sessions, with the RBI believed to have sold dollars near 95.25 on Monday, even as importer hedging and elevated crude costs kept demand for the dollar firm, a bank currency trader cited by Reuters said the RBI has been “consistently” on the offer.

The backdrop is a sharp rise in government bond yields across major economies. LiveMint Markets noted that the average yield on global government bonds has risen to 3.68%, the highest level since the 2008 financial crisis, with higher yields seen as a factor that can tighten financial conditions and increase volatility across currencies and other asset classes, including equities.

Crude oil also remained a direct risk for the rupee, the outlet said, after hopes for an immediate breakthrough on reopening the Strait of Hormuz faded. LiveMint Markets reported that negotiations grew more complicated following fresh demands from US President Donald Trump on Iran, including compensation related to regional conflicts, pushing Brent crude nearly 5% higher.

Latest closeWTI crude $82.30 ▲5.3%|Brent $87.85 ▲5.2%

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