The Indian rupee depreciated by 45 paise to 94.67 against the US dollar in early trade on Friday, influenced by a rise in Brent crude prices, which surged back to USD 101.00 per barrel after reports of an exchange of fire between US and Iranian forces near the Strait of Hormuz.
Forex traders noted that investor sentiment was impacted after Iran accused the US of breaching a ceasefire agreement, as the US conducted retaliatory strikes that occurred in the Strait of Hormuz and other civilian areas. In contrast, President Donald Trump maintained that the ceasefire remains in effect.
Brent oil prices, which had decreased to $98 per barrel amid hopes for a peace deal between the US and Iran, edged higher to $101 per barrel as market participants evaluated the implications for stability in the Middle East.
At the interbank foreign exchange market, the rupee started at 94.58 against the US dollar but lost ground, reaching 94.67, marking a decline of 45 paise from its previous close. On Thursday, the rupee had reduced initial losses, ultimately appreciating by 27 paise to settle at 94.22 against the dollar.
“Brent oil prices rose by more than 2 percent during Asian trading on Friday following the military confrontation between US and Iranian forces, despite President Trump asserting that the ceasefire was still in effect,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP. Bhansali further indicated that this increase in oil prices pushed the USD/INR rate to 94.43 during the morning session in Asian markets, while the dollar index rose to 98.22, with most Asian currencies showing slight weaknesses.
Moreover, the dollar index, which measures the US dollar’s strength against a basket of six other currencies, was trading at 98.20, reflecting a 0.14 percent increase. Brent crude, a global oil benchmark, was trading at USD 101.14 per barrel, up by 1.08 percent in futures market transactions.
In domestic equity markets, the Sensex fell by 353.50 points to 77,491.02 during early trading, while the Nifty decreased by 109.25 points to 24,225.20. Foreign Institutional Investors had offloaded equities valued at ₹340.89 crore on Thursday, according to exchange data.
