Indian Rupee drops 39 paise to 95.77 against the US dollar due to elevated Brent crude oil prices. Iran”s Strait of Hormuz closure fears fuel oil rally.
Forex traders said with Brent oil prices rising over USD 79 to the barrel the Indian rupee is expected to open weaker at 95.53 levels after Iran declared the Strait of Hormuz as closed.
At the interbank foreign exchange market, the rupee opened at 95.72, then touched 95.77 against the US dollar, registering a loss of 39 paise from its previous close.
On Friday, the rupee rose 9 paise to settle at 95.38 against the US dollar.
“The renewed fighting between the US and Iran revived fears of a major disruption to global Crude supplies,” said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.12, up 0.17 per cent.
Meanwhile, Brent crude, the global oil benchmark, was trading higher by 4.05 per cent at USD 79.09 per barrel in futures trade.
“Brent oil prices rose by more than 4 per cent this Monday morning rising to USD 79.25 per barrel as Iran announced the closure of Strait of Hormuz. The latest rally came after Iran on Sunday expanded missile and drone attacks to Gulf states and the UAE in retaliation for US strikes,” Bhansali added.
On the domestic equity market front, Sensex tanked 616.15 points to 76,946.97 in early trade, while the Nifty dropped 190.50 points to 24,015.
Foreign institutional investors purchased equities worth Rs 2,603.72 crore on a net basis on Friday, according to exchange data.
On the domestic macroeconomic front, the Reserve Bank of India on Friday said the country’s forex reserves jumped USD 7.26 billion to USD 674.193 billion during the week ended July 3.
In the previous reporting week, the forex kitty had dropped by USD 5.654 billion to USD 666.933 billion.
