The rupee opened 52 paise stronger at 96.30 against the US dollar on Thursday, 21 May, supported by a sharp correction in crude oil prices, which also eased pressure on US Treasury yields — a major concern for the domestic currency in recent sessions.
Despite the recovery, the rupee remains on a nine-session losing streak, having declined 2.5% during the period while repeatedly hitting fresh record lows against the dollar.
As per a Reuters report, currency market participants noted that any decline in the dollar-rupee pair is likely to attract buying interest from importers. Brent crude fell 5.6% on Wednesday, trading near $105 per barrel as investors tracked developments in US-Iran negotiations.
US President Donald Trump indicated that negotiations are nearing completion, while cautioning that further attacks could occur if an agreement does not come to fruition.
At the same time, the recent decline in US Treasuries came to a halt as lower oil prices alleviated inflation worries. On Wednesday, the yield on the US 10-year bond fell by almost 10 basis points, dropping below the 4.60% threshold.
(more to come)