The Indian rupee pared all its opening gains to close weaker on Thursday as rising crude oil prices increased the demand for dollars from oil importers.
The local currency depreciated 3 paise to close at 83.56 against the greenback after it opened at Rs 83.51, according to Bloomberg. It had closed at Rs 83.53 on Wednesday.
“Crude prices showed bullish momentum after US crude supplies dropped more than expected, hints for an increase in demand,” said a forex analyst with Mecklai Financial Services. “US crude inventories decreased by 3.4 million barrels to 445.1 million barrels. It exceeded the 1.3 million barrel decline that was expected.”
The US Dollar Index was at 104.87, and Brent crude was at $85.35 per barrel.
“Thursday’s US inflation report could test markets with consensus on the first Fed rate cut of this cycle in September,” said Anil Kumar Bhansali, head of Treasury and executive director of Finrex Treasury Advisors LLP.
