By Nimesh Vora
MUMBAI, – The Indian rupee is set to inch higher at Thursday’s open, extending the previous session’s rally, helped by a pullback in oil prices.
However, bankers cautioned that crude has recovered from its lows, while uncertainty over whether current U.S.-Iran optimism will translate into a breakthrough is likely to cap the rupee’s upside.
The rupee is expected to open in the 94.54-94.58 range, traders said, after settling 0.7% higher at 94.61 on Wednesday.
Brent crude hovered near $101 a barrel, after sliding nearly 8% on Wednesday on reports that the United States and Iran were nearing a peace deal.
However, optimism cooled after U.S. President Donald Trump said it was “too soon” for face-to-face talks with Tehran, while a senior Iranian lawmaker said the U.S. proposal was more of a wish list than reality. Prices partly recovered from the session low of $96.75.
“The degree of optimism oscillated through the day in response to various statements from both sides,” ANZ Bank said in a note.
“The situation remains highly fluid with intraday volatility likely to remain high.”
An Iranian foreign ministry spokesperson cited by Iran’s ISNA news agency said Tehran would convey its response. Trump said he believed Iran wanted an agreement.
U.S. equities rallied on Wednesday, while U.S. Treasury yields and the dollar dropped.
A “large part” of the optimism around a potential U.S.-Iran deal was priced in late yesterday, a currency trader at a private sector bank said. From here, it’s about incremental headlines, he added.
Oil near $100 is “still too high”, and for the rupee to see sustained relief, that would need to be corrected, he said.
A pullback in oil prices would offer much-needed relief for oil-importing India and the rupee. The run-up over the past two months has prompted economists to lower rupee forecasts, revise inflation expectations higher, and downgrade growth outlooks.
(Reporting by Nimesh Vora; Editing by Rashmi Aich)
Source link
#Rupee #buoyed #cheaper #oil #USIran #uncertainty #check #momentum
