Industry Odisha Bureau, July 6: The Indian rupee today weakened by 10 paise to 95.28 against the US dollar in early trade on Monday. With this, a firmer US dollar and lingering geopolitical uncertainty continues to weigh on the domestic currency.
The local currency opened at 95.25 in the interbank foreign exchange market before slipping to 95.28. On Friday, the rupee had gained 17 paise to close at 95.18 against the US dollar.
Forex traders said that the Reserve Bank of India (RBI) is likely to use any fresh foreign capital inflows. This is in order to strengthen the country’s foreign exchange reserves instead of allowing the rupee to appreciate significantly. They also pointed to uncertainty surrounding the US-Iran peace talks.
Managing Director of CR Forex Advisors Amit Pabari said that the rupee’s inability to strengthen despite supportive global factors reflect the underlying weakness in market sentiment.
He said, “When the rupee cannot rally on positive developments such as lower crude oil prices and a softer dollar, indicates that the market sentiment remains fragile. Any fresh negative trigger could push the USD-INR pair towards the 95.80-96.00 range. Meanwhile, support is expected between 94.80 and 95.00.”
The dollar index measures the US currency against a basket of six major currencies. It was up 0.10% at 100.95. Brent crude, the global oil benchmark, fell 0.58% to $71.70 per barrel.
Meanwhile, the domestic equity markets opened higher early today. The Sensex gained 281.40 points to 78,051.03. At the same time, Nifty rose 74.60 points to 24,347.05 in early trade. Exchange data shows that foreign institutional investors (FIIs) remained net buyers on Friday, purchasing equities worth Rs 1,355.33 crore.
