Currency Market Update: Rupee fell again against the dollar, know how much the dollar reached?

Business Desk – Currency Market Update: Amid uncertainty over peace efforts between America and Iran, Brent crude went above $100 per barrel, due to which the rupee opened 10 paise lower on May 7. The currency opened at 94.71 against the dollar after closing at 94.61 in the previous session. It was a session in which the currency gained about 0.6 percent, one of its biggest gains in almost a month.

Globally, Brent crude prices showed a slight recovery early in the day and traded near $102 per barrel, although it remained close to its two-week low. The previous day, prices had fallen by about 8 percent after reports that the US and Iran were nearing a peace deal. However, prices jumped again later after US President Donald Trump said it was “too early” for face-to-face talks with Tehran.

Market participants are now focusing on a crucial 48-hour period during which the US awaits a formal response from Tehran. According to traders, the rupee remains under continued pressure from importers who want to hedge their positions, while the Reserve Bank of India (RBI) remains on the lookout to prevent any sharp fall in the currency.

Amit Pabari, Managing Director, CR Forex Advisors said, “The area of ​​Rs 95.30–Rs 95.50 could act as a strong resistance zone. A pullback towards the range of Rs 94.20–Rs 93.80 seems possible, as the market is sensing recent developments and reacting to any further reduction in geopolitical tensions.”

Bankers cautioned that although crude has recovered from its recent lows, the prospects for the US-Iran standoff remain uncertain, particularly whether they will reach a conclusive outcome. This may limit the rupee’s upside potential.

A currency trader at a private sector bank said that “a large part” of the expectations built on the US-Iran deal had already been priced in the previous day. He told Reuters that, from now on, it is basically a story that will unfold gradually through headlines.

He further said that oil prices are hovering around $100, which is “still too high”. For the rupee to get sustained relief, these prices need to improve (fall).