Sharp recovery in INR supported by deep decline in oil prices; dollar pullback
The Indian rupee witnessed a sharp rebound against the dollar in opening trades on Tuesday tracking a pullback in dollar and deep decline in international crude oil prices. WTI crude oil futures are down around 2.5% in early Asia on Tuesday following a sharp plunge by over 7% in the previous session as President Trumps announced that a ceasefire has been agreed upon between Iran and Israel. Meanwhile, dollar dropped from a 3-week high after Fed Governor Bowman and Chicago Fed President Goolsbee said they favored a Fed rate cut at next months FOMC meeting. INR opened at Rs 86.07 per dollar but pared gains to be currently quoting at 86.11.
Yesterday, rupee plunged 23 paise to close at a five-month low of 86.78 against the US dollar amid a strengthening dollar and volatile crude oil prices following the US strike on Iran's nuclear facilities. A sharp decline in the domestic equity markets further pressured the rupee. Indian shares fell on Monday, but ended off their day's lows as markets apparently took the U.S. strikes against nuclear targets in Iran in their stride and waited to see how Iran reacts and what happens to Tehran's nuclear program. The benchmark 30-share BSE Sensex hit an intraday low of 81,476.76 before closing down 511.38 points, or 0.62 percent, at 81,896.79. The broader NSE Nifty index ended down 140.50 points, or 0.56 percent, at 24,971.90, after having hit a low of 24,824.85 earlier. On the NSE, USDINR futures ended higher by 0.14% at 86.78.
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