The India rupee strengthened by 18 paise to 90.12 against the US dollar in early trade on Tuesday, driven by a weaker greenback and a dip in global crude oil prices.
In the foreign exchange market, the rupee opened stronger at 90.18 and soon gained further to 90.12, up 18 paise from its previous close. On Monday, the rupee remained weak for the fourth consecutive session, closing 10 paise lower at 90.30 against the US dollar.
“Trump threatened India with more tariffs if India did not toe the line of not buying oil from Russia. The rupee continues to be hampered by the threats. There is a good chance for the rupee to go back to 91 levels with the trade deal not happening in the near future,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
A forex dealer said that a softer US dollar index and a positive opening in Indian equity markets largely drove the rupee’s appreciation. The dollar index, which measures the greenback’s strength against a basket of six major currencies, remained under pressure and was trading at 0.04 per cent higher at 98.22.
“The US dollar index fell to 98.31 levels after the US ISM Manufacturing PMI came lower than expected at 47.9, giving the market an indication of rate cuts due to a weakening economy,” Bhansali added.
Brent Crude, the global oil benchmark, was trading 0.31 per cent lower at USD 61.57 per barrel in future trade.
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In early trading, the 30-share benchmark index Sensex dropped 431.95 points to 85,007.67, while the NSE Nifty fell 105.60 points to 26,144.70.
