Due to the continuous rise in the dollar for 9 consecutive days, there was a decline in the rupee. Life time had reached a lower level as the figure reached near 97. But on the 10th day, due to this influence of dollar, the rupee took such a hit that the American currency was seen getting defeated and the rupee was once again seen standing strong. On the other hand, crude oil prices appeared to have fallen below $110 and geopolitical tension appeared to be easing when Donald Trump indicated that peace talks with Iran were entering their final stages. Due to all these things, there was relief in the rupee. Let us also tell you how the tables turned on the currency market and the arrogance of the dollar appeared to be breaking.
Rupee increased by 41 paise
In early trade on Thursday, the rupee appreciated by 41 paise from its lowest closing level to 96.45 against the US dollar after US President Donald Trump indicated that talks with Iran were reaching their final stages. Forex traders said investors were still assessing geopolitical risks and sensitivity to oil prices. In this backdrop, there remains a possibility of increased tensions in the Middle East or a sudden jump in crude oil prices
At the interbank foreign exchange market, the rupee opened at 96.25 against the US dollar, and then touched 96.45 in early trade. This was an increase of 41 paise from its all-time low of 96.86 against the US dollar. On Wednesday, the rupee had hit a new low of 96.95 and later closed at 96.86. This was also a new low close, as demand for the dollar remained strong, the dollar index remained higher, and crude oil prices also remained at high levels near US$110 during the day.
Will the rupee become stronger?
CR Forex Advisors MD Amit Pabari said that from a technical perspective, the 97.00 level is expected to act as an immediate resistance area for USDINR, while support may be found around the 95.5095.80 level. Pabari further said that the rupee is likely to remain under broad pressure as long as geopolitical tensions persist. He said that RBI measures and liquidity support, may provide temporary relief in the near future. and can help control exchange rate fluctuations
dollar and market situation
- Meanwhile, the dollar index – which measures the US dollar’s strength against a basket of six currencies – was trading 0.09 per cent higher at 99.18.
- In the international market, crude oil from Gulf countries was trading at US $ 105.77 per barrel with a gain of 0.71 percent in futures trading.
- On the domestic stock market front, Sensex rose 327.74 points to 75,646.13 in early trade, while Nifty was trading 111.75 points higher at 23,772.05.
- According to exchange data, foreign institutional investors sold shares worth Rs 1,597.35 crore on a net basis on Wednesday.
Geopolitical tension still persists
According to American media reports, there was a heated conversation over the phone between US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu regarding the future strategy of war with Iran. This came as Washington appeared to be in favor of a deal rather than resuming strikes. US media outlet Axios reported on Wednesday that Netanyahu was “extremely angry” after a phone conversation with Trump on Tuesday. The report also said that the Israeli prime minister was willing to resume strikes in order to further weaken Iran’s military capabilities and weaken its government by destroying its critical infrastructure. Trump said on Sunday that he had called on Iran for Tuesday. Planned attacks have been postponed. He took this decision on the request of some Arab countries including Qatar and UAE.
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