Indian rupee closed marginally higher against the US Dollar on Wednesday as easing crude oil prices dampened, and a weakened dollar index supported the rupee growth, although it lost most of its early gains. The figures showed that the rupee closed at 85.28 per dollar, gaining 6 paise from its previous closing point of 85.34.
The session started on a positive note when the rupee opened 21 paise higher, but the volatility in the markets remained it frustrating further upmove. The pink token has continued to be in trouble in May with a drop of close to 0.80% over the month as the global economy remains doubts and conflicting domestic clues.
A significant reduction in crude oil prices in the global market was one of the most important catalysts that played a significant role in propping up the rupee. Brent crude, which peaked at a two-week high earlier during the session, shed by 1.13 percent to trade at $65.88 per barrel. In the same trend, the West Texas Intermediate (WTI) crude decreased by 1.21% to $62.90 per barrel late in the afternoon. This decline came after statements by the US President Donald Trump, who confirmed that if a new nuclear deal is not reached, the exports of oil products would be forced to zero announcement which had initially stirred the oil markets but calmed when prices cooled.
In the meantime, the US dollar index, which shows the strength of the greenback against a basket of six major global currencies, declined by 0.68% to settle at 100.31. It’s earlier rebound this week, when indications of a possible resolution in the US-China trade standoff had been evident, ran its course, with the investors again losing faith.
On an overall basis, considering intra-day volatility, the rupee of India was able to end up in green, owing to the positive external factors. Analysts, however, warn that a prolonged backing of the currency will depend on unwavering global cues, commodity prices, and home-based macroeconomic data in the near future.
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