The Indian rupee weakened by 14 paise to 86.57 against the US dollar in early trading on Thursday, June 19. The dollar index rose as investors sought safe-haven assets amid ongoing risk-off sentiment.
Forex traders said that geopolitical tensions, cautious market mood, and high crude oil prices weighed on the rupee. Additionally, strong demand for the dollar from oil importers hurt investment sentiment.
In the interbank market, the rupee opened at 86.54 against the dollar. It traded between an early high of 86.49 and a low of 86.57 in initial deals.
On Wednesday, June 18, the rupee had fallen 9 paise to close at 86.43 against the dollar.
Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said, “With uncertainty dominating the market, the rupee may stay weak in the coming days. Today, we expect the rupee to trade between 86.25 and 86.75, as we watch developments in the Middle East and trade issues.”
Meanwhile, the US Federal Reserve kept interest rates steady, rejecting calls from former President Donald Trump to cut rates by 250 basis points. Bhansali added, “The Fed’s signals were mixed. While they held rates, they still project two quarter-point cuts this year.”
The dollar index, which measures the greenback’s strength against six major currencies, rose 0.06% to 98.96.
