Mumbai: The rupee fell 19 paise to 94.75 against the American currency in early trade on Wednesday, July 1, weighed down by the strength of the American currency in the overseas market.
Forex traders said whenever fresh foreign inflows enter the country, the central bank is likely to use the opportunity to rebuild its reserve position rather than allowing the rupee to strengthen too much.
Moreover, uncertainty prevailed over the progress of US-Iran peace talks keeping a geopolitical risk premium in the market.
At the interbank foreign exchange market, the rupee opened at 94.67, then touched 94.75 against the US dollar, registering a loss of 19 paise from its previous close.
On Tuesday, the rupee depreciated by 5 paise to close at 94.56 against the US dollar.
“The global dollar is also adding pressure. After the US Federal Reserve maintained a cautious stance in its latest policy meeting, the Dollar Index has continued to hold above the 101 mark,” CR Forex Advisors MD Amit Pabari said.
As long as the dollar stays firm globally, the rupee is likely to remain under pressure, he added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.34, up 0.15 per cent.
Meanwhile, Brent crude, the global oil benchmark, was trading higher by 0.38 per cent at USD 73.23 per barrel in futures trade.
According to Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, continued normalisation of oil flows through the Strait of Hormuz following the US-Iran ceasefire and diplomatic engagement kept it at the lower side at USD 73.15 per barrel this morning as uncertainty over the progress of US-Iran peace talks kept a risk premiums in the market.
On the domestic equity market front, Sensex climbed 182.42 points to 76,661.36 in early trade, while the Nifty was up 49.90 points to 23,916.85.
Foreign institutional investors sold equities worth Rs 2,556.75 crore on a net basis on Tuesday, according to exchange data.
On the domestic macroeconomic front, India’s fiscal deficit touched 9.6 per cent of the FY27 budget target at the end of May, government data showed on Tuesday.
The fiscal deficit, or gap between the government’s expenditure and revenue, was Rs 1.62 lakh crore in value terms at the end of May 2026, data released by the Controller General of Accounts (CGA) showed.
