Rupee Ends Lower
The Indian rupee ended Monday's trading session marginally weaker against the US dollar.
The currency declined 3 paise to ₹95.74 per dollar, compared with Friday's close of ₹95.71.
Trading Remains Range-Bound
At the interbank foreign exchange market, the rupee opened at ₹95.65.
It touched an intraday high of ₹95.64 and a low of ₹95.75 before settling at ₹95.74.
Stronger Dollar Weighs
A firmer US dollar put pressure on the Indian currency.
The dollar index also strengthened during the session, making the rupee's recovery more difficult.
Crude Oil Prices Add Pressure
Higher Brent crude prices were another major factor weighing on the rupee.
India imports a large portion of its crude oil requirements. Higher oil prices increase the country's dollar demand and can therefore put additional pressure on the rupee.
Importer Dollar Demand
Forex traders said persistent demand for dollars from importers also limited the rupee's gains.
Investor sentiment remained cautious amid geopolitical uncertainty and expectations of new US sanctions targeting Iran.
Weak Domestic Markets
Weakness in domestic equity markets also reduced support for the rupee.
Foreign investment flows and broader risk sentiment can influence demand for the Indian currency, particularly during periods of heightened global uncertainty.
RBI Intervention
Market participants are also closely watching the Reserve Bank of India's intervention in the foreign exchange market.
The RBI has remained active in the currency market in recent weeks to help contain excessive volatility in the rupee.
Outlook for the Rupee
The rupee's direction in the coming sessions is likely to depend on crude oil prices, movements in the US dollar, foreign investment flows and geopolitical developments.
Any further escalation in US-Iran tensions could push oil prices higher and increase pressure on India's import bill and the rupee.
Conclusion
The Indian rupee fell 3 paise to close at ₹95.74 against the US dollar on Monday.
A stronger dollar, rising crude prices, importer demand and geopolitical uncertainty surrounding Iran weighed on the currency. Markets will closely watch oil prices, US-Iran developments and RBI intervention for the rupee's next move.
