Rupee ends nearly flat as traders watch oil moves, RBI caps fall
USO•The rupee closed nearly flat at 95.98 per dollar after falling 0.2% to 96.1475 earlier, as oil prices turned lower and likely central bank intervention limited losses. Brent had touched nearly $108 per barrel.
1. Rupee trims early losses
The Indian rupee closed nearly unchanged on Tuesday after hitting a two-month low earlier in the session. It fell 0.2% to 96.1475 in early trading before recovering to 95.98 as Brent oil prices turned lower.
2. Oil and intervention in focus
Dollar sales by state-run banks, most likely on behalf of the Reserve Bank of India, helped limit the rupee’s early decline, traders said. India imports nearly 90% of its crude requirements. One trader said a break in oil below $100 per barrel could take the rupee to 95.40-50 per dollar, while current levels should keep it closer to 96.
3. Dollar and rates backdrop
Uncertainty over efforts to end the US-Iran war has kept oil prices and US Treasury yields elevated, boosting the dollar. The US 10-year Treasury yield was at 5.246%, while the dollar index rose 0.3% to 101.5. Investors were also watching US job openings data and remarks from Federal Reserve policymakers.
