Dollar Weakness and Lower Crude Prices Support Rupee
The Indian rupee strengthened by 18 paise to 90.12 against the US dollar in early trade on Tuesday, January 6, supported by a softer US dollar and a decline in global crude oil prices.At the interbank foreign exchange market, the rupee opened at 90.22 against the greenback and moved higher to 90.12, marking a sharp recovery from its previous close.
Tariff Remarks and Equity Weakness Limit Upside
Despite the early gains, the rupee’s upside remained capped due to remarks on tariffs by US President Donald Trump, continued foreign fund outflows, and weak sentiment in domestic equity markets.In the previous session on Monday, the rupee had extended its losing streak for a fourth consecutive day, closing 10 paise lower at 90.30 against the US dollar amid heightened geopolitical uncertainty that boosted demand for the greenback.
Geopolitical Developments Add to Market Caution
Global markets remained cautious following developments in South America, where the United States carried out a military operation in Venezuela and removed President Nicolas Maduro from power. President Trump stated that the US would take control of the country and utilise its oil reserves for supply to other nations, adding another layer of uncertainty to global markets.Dollar Index and Crude Oil Update
The dollar index, which measures the US currency against a basket of six major currencies, was trading marginally higher by 0.04 percent at 98.22 in early trade.Meanwhile, Brent crude, the global oil benchmark, slipped 0.31 percent to USD 61.57 per barrel in futures trading, offering some relief to oil-importing economies like India.
Equity Markets and FII Activity
Domestic equity markets opened under pressure, with the Sensex falling 431.95 points to 85,007.67, while the Nifty declined 105.6 points to 26,144.70 in early trade.Foreign institutional investors remained net sellers, offloading equities worth Rs 36.25 crore in the previous session, according to exchange data.
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