The rupee rose against the US dollar for the second consecutive trading session on Wednesday. The domestic currency climbed two paise to touch 79.84 against the greenback amid fall in global crude oil benchmarks. Slight upward movement in US dollar, however, kept the gains in check.

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The rupee settled at 79.86 against the dollar in the previous session.

Abhishek Goenka, Founder and CEO, IFA GLobal, said, "Rupee was under pressure through the session yesterday . Central bank was likely intervening around 79.90." Goenka added that the outperformance of Rupee resulted in a steep fall in Cross/INR rates with EUR/INR approaching 79 yesterday and GBP/INR trading below 94. Rupee strengthened further against the Yuan to 11.62.

According to Goenka, the rupee is likely to trade a 79.75-80.05 range with weakening bias.

The key catalyst behind the recent phase of depreciation has been the renewed strength in the Dollar Index, Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking, told CNBC- TV18.com. "The greenback reversed course from the key 104.63 mark tested just two weeks ago and has been on an upward incline since then. Hawkish comments from various Feds officials indicating the steep path of rate hikes by the US Fed until inflation comes down meaningfully have underpinned the dollar index."

A rebound in crude oil prices where they are yet again hovering around the crucial $100 bbl mark, and correction in domestic equities have further roiled the sentiments for the domestic currency, she added.

On possibility of rupee weakening to 80 and beyond, Sachdeva said, "The Indian rupee has been strongly supported by the crucial 80 to the dollar mark where renewed portfolio inflows since July, subdued crude oil prices, and active RBI intervention have helped it to hold above the same level. We feel that the rupee will remain underpinned by the mentioned support mark of 80 in the near term."

Sachdeva said that a decisive breach of the 109.50 mark for the dollar index and crude oil prices sustaining above $100 a barrel can act as major headwinds and lead the rupee-dollar exchange rate even below the 80 to the dollar mark.

"The speech of the Fed chair at the Jackson Hole Symposium, where he is likely to provide guidance about the monetary tightening path of the US central bank and the trend of crude oil prices will provide further cues for the Indian rupee and dictate the trend in the coming days," she said.

The dollar index — which measures the US dollar against a basket of currencies — climbed 0.2.

Crude oil prices fell on Wednesday on fears of output cut by Organization of the Petroleum Exporting Countries and Allies (OPEC). Brent crude futures slumped 0.5 percent to $99.7 a barrel and West Texas Intermediate (WTI) futures were 0.4 percent down at $93.4 a barrel.

The Indian equity benchmarks — BSE Sensex and NSE Nifty50 — opened in red for the third consecutive session on Wednesday tracing largely negative trends in global markets. The Sensex dropped as much as 271.2 points or 0.5 percent to 58,760.1 and the Nifty50 slipped to as low as 17,525.5, down 52.1 points or 0.3 percent in opening trade.

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First Published:Aug 24, 2022 10:18 AM IST