The Crossbill News Desk
The Indian rupee ended Monday’s session (October 19) almost unchanged at 94.9250 against the US dollar, as falling domestic equities and demand for dollars from importers offset the support from a decline in crude oil prices.
The currency traded in a narrow range of 94.76 to 94.96 during the day, surrendering its modest early gains to finish close to Friday’s closing level.
The weakness in domestic shares weighed on the rupee, with the benchmark Nifty 50 dropping more than 1%. Losses in heavyweight information technology and financial stocks added to the pressure, as these sectors account for a substantial share of foreign investor holdings in the Indian market, Reuters reported.
Traders said importers’ demand for dollars also dragged on the domestic currency. This came despite Brent crude oil prices falling around 2% to $108 per barrel, following US President Donald Trump’s decision to waive certain sanctions on Russia.
US Secretary of State Marco Rubio said Trump would take up to 60 days to assess the impact of sanctions and tariffs on the global economy. However, uncertainty over the direction of US policy and the possibility of renewed conflict in the Middle East continued to weigh on market sentiment.
Investors are increasingly viewing the US midterm elections in November as a potential source of market volatility.
An FX salesperson at a foreign bank said the election would be a "risk event," after which either the Iran war could restart or it could diminish in focus for markets.
Trump has previously said the US will not attack Iran before the November vote. Nevertheless, traders expect the prospect of renewed hostilities in the Middle East to keep investors cautious in the near term.
Attention is also turning to the Reserve Bank of India’s October policy meeting minutes, which are due for release. The central bank delivered its first interest rate hike in four years at the meeting, and investors will examine the minutes for indications of the pace and scale of any further tightening.
With pressure from domestic equities, dollar demand and geopolitical uncertainty persisting, the rupee’s near-term direction is likely to depend on both global risk sentiment and signals from the RBI on its next policy moves.
The currency traded in a narrow range of 94.76 to 94.96 during the day, surrendering its modest early gains to finish close to Friday’s closing level.
The weakness in domestic shares weighed on the rupee, with the benchmark Nifty 50 dropping more than 1%. Losses in heavyweight information technology and financial stocks added to the pressure, as these sectors account for a substantial share of foreign investor holdings in the Indian market, Reuters reported.
Traders said importers’ demand for dollars also dragged on the domestic currency. This came despite Brent crude oil prices falling around 2% to $108 per barrel, following US President Donald Trump’s decision to waive certain sanctions on Russia.
US Secretary of State Marco Rubio said Trump would take up to 60 days to assess the impact of sanctions and tariffs on the global economy. However, uncertainty over the direction of US policy and the possibility of renewed conflict in the Middle East continued to weigh on market sentiment.
Investors are increasingly viewing the US midterm elections in November as a potential source of market volatility.
An FX salesperson at a foreign bank said the election would be a "risk event," after which either the Iran war could restart or it could diminish in focus for markets.
Trump has previously said the US will not attack Iran before the November vote. Nevertheless, traders expect the prospect of renewed hostilities in the Middle East to keep investors cautious in the near term.
Attention is also turning to the Reserve Bank of India’s October policy meeting minutes, which are due for release. The central bank delivered its first interest rate hike in four years at the meeting, and investors will examine the minutes for indications of the pace and scale of any further tightening.
With pressure from domestic equities, dollar demand and geopolitical uncertainty persisting, the rupee’s near-term direction is likely to depend on both global risk sentiment and signals from the RBI on its next policy moves.
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