Rupee rises 23 paise to 94.95 against US dollar in early trade

Mumbai: The rupee appreciated by 23 paise to 94.95 against the US dollar in early trade on Wednesday as Brent crude prices retreated from their elevated level after US President Donald Trump hinted at a possible deal with Iran.

Forex traders said oil prices fell to $108 per barrel, as signs of easing geopolitical tensions in the Middle East offset the lingering supply concerns.

At the interbank foreign exchange market, the rupee opened at 95, then gained some ground and touched an early high of 94.95, registering a gain of 23 paise from its previous low.

The rupee was later trading at 95.10 against the greenback.

On Tuesday, the rupee settled at 95.18 against the US dollar, after witnessing an all-time intraday low of 95.44 on Tuesday on possible RBI intervention after investors retreated from riskier assets amid renewed clashes in the Gulf and targeting of UAE infrastructure, which reignited supply chain fears.

The rupee, which fell to its all-time low of 95.44 on Tuesday, gained this morning as Gift Nifty indicated a positive opening of 200 points, said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

The dollar Index fell to 98.30, and Asian currencies rose against the dollar this morning in Asian trade, after Trump hinted at a possible deal with Iran, Bhansali added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.28, down 0.16 per cent.

Brent crude, the global oil benchmark, was trading lower by 1.32 per cent at $108.42 per barrel in futures trade, after Trump paused Operation Freedom.

President Donald Trump has suspended “Project Freedom,” to escort ships through the Strait of Hormuz, claiming progress in negotiations with Iran toward an agreement to end the war.

In a post on Truth Social on Tuesday, Trump said, “Great progress has been made toward a complete and final agreement with representatives of Iran.” Project Freedom was launched on Monday to escort ships, stranded due to the closure of the Strait of Hormuz, out to safety. Trump had announced the operation on Sunday, and the US Central Command began implementing it the next day.

However, the Project led to friction in the vicinity of the narrow seaway, a key route for transporting one-fifth of the global oil supplies, with the UAE claiming that its ships were attacked by Iran. The US also claimed to have destroyed several Iranian small boats.

On the domestic equity market front, Sensex jumped 657.22 points to 77,675.01 in early trade, while the Nifty rallied 218 points to 24,250.85.

Foreign Institutional Investors sold equities worth Rs 3,621.58 crore on Tuesday, according to exchange data.