The local unit rose 5ps to close at 94.53/$, expect it to trade with a positive bias

Mumbai

Therupee appreciated for the third straight session on Tuesday to close 5 paise higher at 94.53 (provisional) against the US dollar, supported by easing West Asia tensions and extended fall in crude oil prices. Forex traders said that with the reported de-escalation of the US-Iran conflict and diplomatic agreements regarding the Strait of Hormuz, the immediate threat to global energy supplies has significantly reduced.

Moreover, softening of the US dollar and a decline in US treasury yields also supported the USD/INR pair, they said. At the interbank foreign exchange, the rupee opened at 94.69 against the US dollar and traded in the range of 94.48-94.71. Eventually, it settled at 94.53 (provisional), up 5 paise from its previous close.

“We expect the rupee to trade with a positive bias as global markets cheer the US-Iran deal, which has boosted global risk sentiments. Declining US dollar and falling crude oil prices may further support the rupee. “Easing inflation concerns and expectations of fresh foreign inflows may also support the rupee. USDINR spot price is expected to trade in a range of 94.10 to 94.90,” said Anuj Choudhary, Research Analyst at Mirae Asset ShareKhan.

On Monday, the rupee strengthened by 60 paise to settle at 94.58 against the US dollar. In the past three trading sessions, the USD/INR pair has gained 132 paise against the US dollar. Forex traders said that with oil prices moving in India’s favour and foreign inflows remaining supportive, the near-term outlook for the rupee remains positive. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.61, lower by 0.01 per cent.