The Indian rupee remained under pressure in early trade on September 8, falling 10 paise to Rs. 94.66 against the US dollar as rising crude prices and escalating tensions in the Middle East weighed on investor sentiment. The currency opened at Rs. 94.49 at the interbank foreign exchange market before weakening to Rs. 94.66.
The decline followed a 13-paise fall on September 7, when the rupee closed at Rs. 94.56 against the dollar.
The latest price drop in the rupee came as Brent crude prices climbed towards USD 98 per barrel. Brent futures rose 0.63% to around USD 97.61, driven by concerns over possible disruptions to oil supplies amid escalating US-Iran tensions
Usually, rising oil prices negatively affect the rupee due to the country’s heavy reliance on imported oil. Any rise in the country’s import bill leads to higher dollar requirements.
This latest development caused concerns regarding the transport of energy through the Strait of Hormuz, which is considered an important route for oil shipments. As reported by Reuters, Brent crude was at about USD 97.49 per barrel on Tuesday.
Market participants are now watching upcoming inflation data from India and the US for clues about the direction of interest rates and currency markets. The US Federal Reserve's September 16 policy meeting will also remain a key focus.
The dollar index stood around 98.80, while analysts expect the rupee to remain range-bound if crude prices stay elevated but RBI support continues.
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