Rupee opens 13 paise higher at 95.26 against US dollar

The Indian rupee opened 13 paise higher at 95.26 against the US dollar on Friday, 10 July, supported by softer crude oil prices and a broadly weaker US dollar. However, traders remained cautious as the ongoing US-Iran conflict continued to weigh on market sentiment.

So far this week, the domestic currency has traded in a 95.60–94.96 range, with renewed military exchanges between the US and Iran weighing on the rupee. Expectations of intervention by the Reserve Bank of India (RBI), however, helped limit further downside.

Meanwhile, heightened geopolitical tensions have kept crude oil prices volatile. Brent crude fluctuated between $71 and $80.50 per barrel during the week and was last trading at around $76.34 per barrel, down nearly 2% from the previous session after a sharp rally.

According to market experts, the resilience of the US labour market continues to underpin the US dollar. Initial jobless claims fell by 2,000 to 215,000 last week, coming in below economists' expectations of 217,000–218,000, while continuing claims remained at levels consistent with a labour market characterised by low hiring and low layoffs.

Experts said the latest data reduces the likelihood of an imminent interest rate cut by the US Federal Reserve. With policymakers also monitoring inflation risks stemming from higher crude oil prices, the combination of a resilient labour market and sticky inflation has kept the US Dollar Index well supported despite ongoing geopolitical uncertainty.

Market experts noted that foreign portfolio investment flows have improved, with overseas investors remaining net buyers of Indian equities for three consecutive weeks, bringing in nearly $3 billion. Debt inflows have also remained robust, with more than $5.25 billion entering Indian debt markets in June following the easing of investment norms.

However, experts cautioned that these inflows are unlikely to fully offset pressure from India's large merchandise trade deficit, which has averaged $25–28 billion per month this year due to elevated crude oil and gold imports. With oil prices remaining volatile amid the ongoing US-Iran conflict and concerns over shipping through the Strait of Hormuz, they believe the external trade gap could widen further, limiting the support provided by foreign capital inflows.

Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives t...