Currency Market News: Rupee slides 19 paise to 85.15 vs US dollar

Rupee fell by 19 paise to 85.15 against the US dollar in early trading on Wednesday, influenced by renewed geopolitical tensions and a surge in demand for the greenback, putting pressure on the local currency.

Forex traders pointed out that heightened geopolitical tensions between India and Pakistan have triggered risk-off sentiment in the market, leading to the rupee's weakness. Despite this, foreign fund inflows and falling crude oil prices provided some support to the rupee.

At the interbank foreign exchange market, the rupee opened at 85.15 against the US dollar, marking a drop of 19 paise from its previous close. On Tuesday, the rupee had gained 27 paise, closing at 84.96 against the greenback.

Market expert insights

"Looking ahead, the rupee is expected to find immediate support in the 84.90–85.00 range, with a slight upward bias, moving towards the 85.80–86.00 levels in the near term," said Amit Pabari, Managing Director of CR Forex Advisors.

Amid rising tensions between India and Pakistan, the US has urged both countries "not to escalate" the conflict. US Secretary of State Marco Rubio will speak with the foreign ministers of both nations. US State Department spokesperson Tammy Bruce confirmed on Tuesday that Washington is engaging with India and Pakistan "regarding the Kashmir situation” and advising them "not to escalate the situation."

The dollar index, which measures the strength of the US dollar against a basket of six currencies, rose by 0.11 percent, reaching 99.34. Brent crude, the global oil benchmark, dropped 1.11 percent to USD 63.54 per barrel in futures trading.

Also Read:Currency Market News: Rupee ends marginally lower at 85.25 against US dollar  

Stock market summary

Indian equities, despite receiving support from continued FII buying and easing tariff concerns, opened lower on Wednesday. The 30-share BSE Sensex dropped by 200.11 points, or 0.25 percent, to 80,088.27, while the Nifty 50 rose by 54.35 points, or 0.22 percent, to 24,281.60. The broader markets also faced a downturn, with the smallcap index underperforming its midcap counterpart.

Foreign institutional investors (FIIs) bought equities worth Rs 2,385.61 crore on a net basis on Tuesday, according to exchange data.

Also Read: First Trade: Sensex falls 200 pts, Nifty hovers near 24,300; Bajaj Finance tumbles 5%

Meanwhile, India and the US are exploring opportunities for an interim trade arrangement in goods to secure an "early mutual win" ahead of finalising the first phase of their proposed bilateral trade agreement by the fall of this year. The commerce ministry announced on Tuesday that both nations have started sectoral-level talks, with further engagements planned from the end of May.

(With inputs from PTI)