Rupee nudges higher, forward premiums dip as markets focus on US midterms and oil moves
INDA•The rupee closed at 94.74 per dollar, up from 94.90 in the previous session, while dollar-rupee forward premiums dipped slightly. Oil prices rebounded as investors watched US midterm results and developments in the Iran war.
1. Rupee gains modestly
The rupee strengthened to close at 94.74 per dollar, compared with 94.90 in the previous session. It reached 94.62 earlier in the day before trimming gains as oil prices rebounded by more than $1 after falling nearly 11% in the previous session.
2. Markets await fresh cues
Investors were watching the US midterm elections and developments in the Iran war. An Iranian official said a deal to end the war was far off, while the United States struck Iran's Qeshm Island, raising concerns about escalation and energy supplies. India imports about 90% of its oil requirements.
3. Forward premiums dip
Dollar-rupee forward premiums slipped slightly as traders waited for fresh signals. Despite the rupee's recent rally from near-record lows last month, options and forward markets indicate investors remain wary of further weakness and are seeking protection against declines. ING said the midterm results were not expected to cause structural shifts in foreign exchange, though the dollar could face short-term pressure if Democrats win both chambers of Congress.
