Rupee rises 20 paise to close at 95.58 against US dollar

Mumbai, Sep 22 (PTI) The rupee appreciated 20 paise to close at 95.58 (provisional) against the US dollar on Tuesday, supported by a sharp fall in crude oil prices on improved global risk sentiments and hopes of diplomatic talks to resolve the US-Iran war.

Forex traders said Brent crude oil prices witnessed a sharp decline after reports surfaced that Iran would open the Strait of Hormuz within seven days if the US lifts its port blockade and eases military pressure around it.

At the interbank foreign exchange market, the rupee opened at 95.75 against the US dollar, then gained some ground and touched 95.55 against the American currency in intraday trade.

At the end of the trading session on Tuesday, the rupee settled at 95.58 (provisional) against the American currency, higher by 20 paise from its previous close.

On Monday, the rupee appreciated 18 paise to close at 95.78 against the US dollar.

“Indian rupee gained on sharp fall in crude oil prices on media reports that Iran would open the Strait of Hormuz within 7 days if the US lifts its port blockade and eases military pressure around it. US dollar index and US Treasury yields too tumbled from higher levels post the media report,” said Anuj Choudhary, Research Analyst, Mirae Asset Sharekhan.

Choudhary further noted that the rupee is expected to trade with a positive bias on improved global risk sentiments and hopes of diplomatic talks to resolve the US-Iran war.

“Falling crude oil prices and a decline in the US dollar may also support the rupee. However, any fresh tensions may cap sharp upside. Traders may take cues from ADP weekly employment change data from the US. USD-INR spot price is expected to trade in a range of 95.30 to 95.80,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.34, lower by 0.08 per cent.

Brent crude, the global oil benchmark, was trading lower by 1.14 per cent at USD 99.20 per barrel in futures trade.

On the domestic equities market front, Sensex dropped 329.91 points to settle at 74,529.08, while the Nifty was down 85.30 points to 23,329.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 576.20 crore on a net basis on Monday, according to exchange data.

Government data released on Monday showed the output of the country’s nine key infrastructure sectors slowed down to a three-month low of 4.8 per cent in August due to a fall in the production of coal, natural gas, crude oil, and fertiliser. The output expanded by 6.2 per cent in the same month last year and by 5 per cent in July this year.