Rupee ends eight-day winning streak on rising oil prices

The Indian rupee weakened on Thursday, ending an eight-day winning streak as higher oil prices and increased demand for the dollar weighed on the currency. It fell 36 paise to 94.82 against the dollar, according to Bloomberg. The rupee was the worst-performing Asian currency on Thursday. After gaining 2.40% over the previous eight sessions and touching a high of 94.47 against the dollar on Wednesday, the currency reversed some gains. Amid the escalating geopolitical tensions, oil prices rose 3.20% to $112.30 per barrel on Thursday, the highest level in five months. Over the past two weeks, it climbed 8%. In addition, we have seen bargain buying come into play to importers lock in those rates. There was strong buying seen around the 94.30 level. Going ahead, crude oil prices and geopolitical developments are likely to drive the rupee market,” said Dilip Parmer, research analyst, HDFC Securities. A dealer at a private bank said offshore dollar-buying demand added to pressure on the rupee. He added that the Reserve Bank of India appeared to have refrained from actively selling dollars to support the currency. Parmer expects the rupee to trade in a range bound in the near-term. For now, 95.30 is likely to act as strong resistance, while on the downside, buyers may be attracted around 94.25–94.30,” he added. While these measures have offered the currency near-term support, analysts caution that the rupee’s trajectory will depend largely on crude oil prices and geopolitical developments. A sustained rise in oil prices would widen India’s import bill.

Rupee ends eight-day winning streak on rising oil prices

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