Currency Market News: Rupee falls 19 paise to 86.23 vs US dollar

Rupee weakened by 19 paise to settle at 86.23 (provisional) against the US dollar on Tuesday, dragged down by rising global crude oil prices, the ongoing Israel-Iran conflict, and a stronger greenback.

Forex traders said weak cues from domestic equities and sustained foreign institutional investor (FII) outflows further dented market sentiment.

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, noted, “The rupee traded weak by 0.18 rupees at 86.22 as rising risk sentiment from escalating Israel-Iran tensions weighed on the currency. Weakness in capital markets signaled potential FII outflows, adding to rupee pressure. Additionally, crude oil prices rose amid concerns that tensions near the Strait of Hormuz may disrupt supply, further dampening rupee sentiment. The trading range for the rupee is expected between 85.75 and 86.55.”

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At the interbank foreign exchange, the domestic currency opened at 85.96 and moved within a range of 85.96 to 86.28 during the session before closing at 86.23, down from Monday’s close of 86.04.

Brent crude, the global oil benchmark, rose 1.60 per cent to USD 74.40 per barrel in futures trade, extending its rally amid fears that escalating tensions could impact supplies through the strategic Strait of Hormuz.

Meanwhile, the dollar index, which measures the greenback’s performance against six major currencies, climbed 0.20 per cent to 98.19, further pressuring emerging market currencies like the rupee.

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Stock market snapshot

In the equity market, broad-based selling pulled down benchmarks. The BSE Sensex slipped 212.85 points to close at 81,583.30, while the NSE Nifty declined 93.10 points to settle at 24,853.40, with pressure from pharma, metal, and PSU bank stocks.

On the macroeconomic front, the unemployment rate rose to 5.6 per cent in May, up from 5.1 per cent in April, primarily due to seasonal factors, as per data from the Ministry of Statistics and Programme Implementation (MoSPI).

FIIs remained net sellers, pulling out Rs 2,539.42 crore worth of equities on Monday, according to exchange data.