Rupee Declines To End At 71.93 Against Dollar As Crude Oil Price Rises

Rising crude oil prices as escalating tensions between the US and Iran fuelled fears of conflict in the Middle East impacted the currency, say analysts.

Rupee Declines To End At 71.93 Against Dollar As Crude Oil Price Rises

The rupee extended its losses to third straight day against the US dollar as crude oil prices surged

The rupee moved lower against the US dollar on Monday as crude oil prices continued to rise amid supply concerns. The rupee started lower at 72.03 against the US currency in intraday trade on Thursday, and dropped to as low as 72.11 during the day before paring some of those losses by the end of the session. Rising crude oil prices as escalating tensions between the US and Iran fuelled fears of conflict in the Middle East impacted the currency, say analysts. The dollar index - which gauges the greenback's strength against a basket of six currencies - fell 0.28 per cent to 96.56.

Here are 10 things to know about the movement in the rupee against the US dollar on Monday (January 6):

  1. The rupee ended at 71.93 against the US currency on Monday, down 13 paise compared with its previous close of 71.80.

  2. That marked the third day in a row when the rupee moved lower against the dollar, a period in which it lost a cumulative 71 paise against the greenback.

  3. Analysts expect some pressure on the rupee to continue against the greenback in the near term due to growing geopolitical tensions.

  4. Crude oil prices continued their sharp upwards momentum on Monday, with Brent futures - the global benchmark - jumping past the $70 a barrel mark.

  5. The gains extended Friday's more than 3 per cent surge after a US air strike in Iraq killed Iranian military commander Qassem Soleimani, heightening concerns about an escalation in conflict in the Middle East and the possible impact on oil supplies.

  6. US President Donald Trump has warned Iran of "major retaliation" if Tehran carries out any attack against America to avenge the killing of Soleimani and hinted at striking its cultural sites.

  7. Mr Trump's statement came hours after Iran announced it will no longer abide by the limits contained in the 2015 landmark nuclear deal.

  8. Domestic stock markets felt the brunt of surging crude oil rates. The S&P BSE Sensex index declined 787.98 points - or 1.90 per cent - to end at 40,676.63 in its worst single-day fall since July 8.

  9. India, the world's third-biggest oil consumer, imports about 80 per cent of its oil needs, making it highly susceptible to crude price swings.

  10. Foreign institutional investors (FIIs) offloaded a net Rs 1,263.05 crore from Indian capital markets on Friday, provisional data from the NSE showed.



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