The rupee opened lower on Tuesday, falling 7 paise to 94.58 against the US dollar as persistent demand for the greenback and a firm US currency weighed on market sentiment.
According to forex dealers, month-end buying by importers and companies seeking dollars for overseas payments kept pressure on the domestic currency. Despite stable crude oil prices, the rupee struggled to recover as investors remained cautious amid global uncertainties.
The local currency had ended the previous session at 94.51, after surrendering its early gains. Tuesday’s decline suggests that demand for the dollar continues to dominate the foreign exchange market.
The US dollar has strengthened against several global currencies on expectations that US interest rates could remain higher for a longer period. This has prompted investors to favour the dollar over emerging market currencies such as the rupee.
Traders are also keeping a close watch on developments in the Middle East, as any escalation could affect crude oil supplies and increase India’s import costs. While oil prices have not seen sharp gains so far, uncertainty in the region continues to influence market sentiment.
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