The rupee settled at 71.34 against 71.22 at the previous close. The
local unit moved in 71.31-71.52 per dollar band intra-day.
The Indian rupee fell against the dollar for a fourth session today, as
higher oil prices that risked further widening of the current account
deficit and weak local equities weighed on sentiment. Crude oil is the
primary reason for weakness in the rupee and local shares, because
higher oil impacts trade deficit and feeds into local inflation that is
practically putting pressure on the currency despite global optimism
over trade talks. Domestic tensions are also making investors
nervous. A weakness in the rupee beyond 71.80 in coming days can
lead to further depreciation towards 72.50.
Global Currency
Foreign exchange markets got off to a slow start Monday, with
trading set to remain subdued due to a sparse data calendar in
Europe and public holidays in North America. The dollar has
retreated slightly over the weekend amid hopes that the U.S. and
China will find a way to de-escalate their trade war. Such hopes were
the main driver of a rally in Asian stock markets overnight
The euro was back above $1.13, up nearly half a cent from the low it
hit on Friday when European Central Bank board member Benoit
Coeure said the euro-zone economy’s slowdown had been deeper
and broader than the ECB first thought.
Global Markets
Gold prices rose to their strongest level in more than two weeks on
Monday as the dollar weakened on hopes the United States and
China are nearing a trade deal, while palladium hit a record high.
The Brent crude oil contract rose to a near three-month high earlier
today, gaining for fifth consecutive session, helped by supply cuts
and due to optimism that the global trade dispute will end soon.
India imports 80% of its crude oil requirements and a surge in oil
risks widening of the country’s current account deficit.
