Rupee Settles at 94.76 Against Dollar as Global Oil Dip Cushions Domestic Weakness

Rupee Settles at 94.76 Against Dollar as Global Oil Dip Cushions Domestic Weakness​

The Indian rupee closed trading at 94.76 against the US dollar on Tuesday, marking a slight depreciation of 13 paise from its previous closing level. The currency faced pressure due to a firm greenback and subdued domestic market activity. However, a decline in global crude oil prices provided some cushioning against what could have been a sharper fall in the rupee unit, forex traders observed.

Rupie Depreciation amid Market Pressure​

At the interbank foreign exchange segment, the rupee opened at 94.73 against the US dollar. It traded within a range of 94.63 to 94.92 before settling at 94.76. This movement follows Monday's depreciation, where the rupee fell by 30 paise to close at 94.63 against the dollar.

The currency weakness was attributed to a strong US dollar and sluggish domestic market performance. Importers' demand for hedging services also weighed on the value of the Indian currency. Crucially, falling crude oil prices and softening in US treasury yields helped mitigate the downside pressure on the rupee.

Analyst Outlook on Rupee Trajectory​

Analysts offered varied perspectives on the near-term trajectory of the rupee. Anuj Choudhary, Research analyst at Mirae Asset ShareKhan, noted that the sharp fall in oil prices was a direct result of the US waiver on sanctions concerning Iranian oil. He stated that they expect the rupee to maintain a negative bias given the strengthening US dollar amid weak global markets and a hawkish Federal Reserve (Fed).

V K Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, suggested that the rupee is likely to trade in a range of 94.60 to 94.95 in the near term. He indicated that the future trend would be significantly influenced by data regarding FCNR B deposits being mobilized by commercial banks. If this deposit scheme succeeds in mobilizing a substantial amount, assisted by low crude prices, the rupee could appreciate over time.

Dollar Index and Global Factors​

The dollar index, which measures the greenback's strength against a basket of six currencies, was observed trading at 101.09, showing an increase of 0.07 per cent. This performance is linked to the hawkish stance maintained by the Fed and the ongoing developments around the US-Iran trade deal.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, projects that the rupee is expected to remain range-bound between 94.20 and 95.00 levels. He noted a trend where upticks toward the dollar are being sold off, while dips are actively bought.

Crude Oil Trend and Equity Market Movement​

Brent crude, the global oil benchmark, was trading lower by 0.54 per cent at USD 77.48 per barrel in futures trade. This downward movement provides a buffer against currency depreciation pressures. The rise in the dollar index is partly attributed to markets pricing in rate hikes toward the end of September 2026, contrasting with expectations for several major central banks to remain accommodative while the Fed remains hawkish and attracts capital towards the US.

On the domestic equity market, both Sensex and Nifty experienced significant declines. The Sensex tanked by 893.39 points, or 1.16 per cent, closing at 76,200.68. Concurrently, the Nifty fell by 278.80 points, or 1.16 per cent, settling at 23,824.10. Foreign institutional investors purchased equities worth Rs 17.86 crore on a net basis on Tuesday, according to exchange data.