The Indian rupee opened 3 paise higher at 94.79 against the US dollar on Friday (October 23), compared with Thursday’s (October 22’s) close of 94.82, after losing 43 paise in the previous session amid rising crude oil prices and weakness in domestic equities.
The rupee had closed at 94.38 on Wednesday (October 21) after gaining 53 paise, before reversing course on Thursday (October 22) to touch an intraday low of 94.94. The sharp reversal came despite a softer dollar index and declining US Treasury yields, which had cushioned the currency’s losses.
Brent crude rose to just below $115 a barrel on Friday (October 23) amid concerns about further supply disruptions following Houthi attacks on Saudi Arabia, a major oil exporter. On Thursday (October 22), Brent futures had risen 3.23% to $112.33 a barrel.
Higher crude oil prices can increase India’s import bill and demand for dollars, putting pressure on the rupee. Forex traders have also flagged the risk of renewed foreign portfolio outflows, although improved near-term dollar liquidity following the Jio Platforms IPO and hopes of a US trade agreement could support the currency.
Global markets meanwhile saw a shift towards safe-haven assets, with US Treasuries and the Japanese yen gaining while US equities sold off amid concerns about the outlook for artificial intelligence spending.
For the rupee, crude oil prices, foreign investor flows, dollar demand from importers and broader global risk sentiment remain key factors to watch.
-With Reuters inputs