Rupee in red: Currency falls 45 paise to 94.67 against US dollar

Rupee began its last trading session of the week in red, falling 45 paise against the US dollar to 94.67 in early trade as rising crude oil prices and fresh tensions around the Strait of Hormuz dragged down market sentiment. Opening at 94.58 in the interbank foreign exchange market, the domestic currency slipped further as the session progressed, extending losses after geopolitical concerns pushed investors towards caution.The weakness followed Thursday’s rebound, when rupee had recovered from initial losses to close 27 paise higher at 94.22 against the greenback. Forex traders said that crude markets turned volatile again after US and Iranian forces exchanged fire near the Strait of Hormuz, reversing earlier optimism that had emerged from the US-Iran peace deal. Brent crude, which had dropped to $98 per barrel on hopes of easing tensions, climbed back to around $101 per barrel as investors reassessed the prospects for stability in the region.Investor sentiment was also hit after Iran accused the US of breaking the ceasefire through retaliatory strikes and fresh attacks in the Strait of Hormuz and civilian areas. Even as tensions escalated, President Donald Trump said the ceasefire continued to hold."Brent oil prices moved higher by more than 2 in Asian trade on Friday after US and Iranian forces exchanged fire near the Strait of Hormuz despite President Trump insisting that the month-old ceasefire remained in effect," said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.Bhansali further added that the rise in oil prices took USD/INR higher towards 94.43 this morning in Asian trading, and the dollar index also moved higher towards 98.22 while Asian currencies were a tad weaker.The stronger dollar added to rupee’s troubles, with the dollar index, which tracks the greenback against six major currencies, rising 0.14% to 98.20.Brent crude futures were also trading 1.08% higher at $101.14 per barrel.The pressure extended to the Dalal Street, where benchmark indices opened sharply lower. The Sensex was down 353.50 points at 77,491.02, while the Nifty declined 109.25 points to 24,225.20. Foreign Institutional Investors continued to remain sellers, with exchange data showing net equity outflows worth Rs 340.89 crore on Thursday.