Rupee vs dollar: During the early trade in the Indian domestic market, on Tuesday, August 13, 2024, the rupee declined by 6 paise during early trade and it broke down against the dollar to 87.69. Foreign currency traders say that the Indian currency is trading in a very limited range due to the steps taken by the RBI to ensure that there is no drop in the rupee.

Weak rupee uncertainty in trade deal

The rupee opened at 87.63 per dollar in the Interbank Forex Exchange Market and reached a low of 87.69 against the US dollar in early trade, showing a weakness of six paise in the previous closed price. A day earlier, on Monday, the rupee closed at 87.63 with a strong 12 paise. It fell at 98.01 with a decline of 0.08 percent in the dollar index showing the US dollar position against six major currencies.

Strength in stock market

Domestic stock markets saw a boom on Tuesday. The BSE Sensex rose by 327.79 points to 80,563.38, while NSE Nifty-50 also closed at 24,599.55 with 112.15 points. International standard Brent crude was trading at $ 66.18 per barrel with a gain of 0.09 percent. According to the stock market data, foreign institutional investors (FII) purely sold shares worth Rs 3,398.80 crore.

Anuj Chaudhary, research analyst (commodity and currency) of Miraye Asset Sharekhan, says that due to the tariff war between India and the US, we estimate that the rupee will trade with a negative attitude. Continuous withdrawal of foreign institutional investors (FIIs) can also put pressure on the rupee. He said that the rupee can get support at a lower level due to weakness in US dollar and decreasing prices of crude oil.

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Rupee vs dollar: The Indian rupee fell 29 paise to 87.95 against the dollar during early trade on Tuesday, which is the lowest level of rupee in the last 6 months. Forex traders believe that this pressure on the rupee can remain as well as this week, as the US has warned to impose high tariffs on India for buying oil from Russia.

In the Interbank Foreign Exchange Market, the rupee opened with a weak trend at 87.95 against the US dollar, which shows a decline of 29 paise compared to Monday’s 87.66.

Why the rupee declines?

The dollar index, which reflects the status of the US dollar against the six major currencies, rose 0.04 percent to 98.81. The domestic stock market also saw weakness, where the BSE Sensex fell by 200.40 points to 80,818.32 in early trade, while NSE Nifty fell 58.90 points to reach 24,663.80. International Brent crude fell 0.28 percent to $ 68.57 per barrel.

The impact of tariff on the stock market

According to the stock market data, foreign institutional investors (FII) were purely selling on Monday. He sold shares worth Rs 2,566.51 crore. Due to America’s warning, there was tension in the market. The US administration has accused India of buying a large amount of crude oil from Russia and selling it with profits.

India has reacted strongly to this. The Ministry of External Affairs said that India has been improperly targeted by the US and the European Union due to importing oil from Russia after the Ukraine struggle started. The ministry clarified that India started this oil imports because traditional supplies were diverted to Europe after the struggle. The statement also said that at that time the US itself encouraged India to do so for the stability of the global energy market. India’s purpose has always been to maintain the cost of energy for the consumers of the country.

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Dollar vs rupee: The continuation of the rupee due to the strength of the dollar in the international market came to an end on Tuesday. During the early trade, the Indian rupee strengthened by five paise to 86.26 per dollar against the US dollar amid positive trends in domestic stock markets. Forex traders say that the situation of uncertainty on tariffs globally remains a big concern for the foreign exchange market. In such a situation, the business of currencies is being done in a very limited range.

Rupee strengthening

During the early trade, the rupee touched the level of 86.29 per dollar. A day earlier on Monday, the rupee fell by 15 paise and it closed at 86.31 trading compared to the dollar. Here, the dollar index, showing the US dollar status against six major currency, rose by 0.03 percent to 97.88. Investors’ eyesight now rests on 1 August by US President Donald Trump regarding the tariff.

India USA watching the deal

Anil Kumar Bhansali, Head of Treasury and Executive Director of Finrex Advisors LLP, says that the price of Brent crude in the Asian market has declined in the Asian market amid the possibility of tension in American and European trade. The direct effect of any kind of obstruction in the trade deal can also be seen on the demand for economic activity and oil.

Bhansali says that on one side the dollar is constantly strengthening. But the dollar is being sold by RBI to save the rupee.
Forex traders say that now everyone is eyeing the trade deal between India and the American, especially on August 1, the confusion has increased in the minds of Indian exporters regarding possible tariffs.

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Iran israel ceasefire: The rapidly rising price of crude oil had created a stir in the international world. The market experts were fearing to reach 110 to 120 dollars per barrel. However, on the sidelines of heavy tension in the Middle East, US President Donald Trump announced a ceasefire between Iran and Israel, crude oil prices fell rapidly. On social media platform Truth Social, President Trump said that ceasefire will become effective in the next 12 hours and the struggle that is going on in the Gulf country at this time will end.

Confirming this, a senior Iran official said that Tehran has agreed on the ceasefire with Israel. Israel’s channel 12 has stated in its report that Prime Minister Benjamin Netanyahu gave his consent to the ceasefire agreement during a conversation with President Donald Trump.

Oil prices fall after ceasefire

After the announcement of the ceasefire, there has been a tremendous decline in the price of crude oil on Monday during the early trade in the Asian market. The price of West Texas Intermediate (WTI) August crude fissures fell 5.1 percent to $ 65.02 a barrel. It is at the bottom after June 12. On this day, Iran was attacked by a missile from Israel.

The price of Brent crude oil has already fallen by 8 percent after the news of no loss of life and property in the counter -attack on the US base in Qatar.

Trump announces ceasefire

President Donald Trump officially posted on Truth Social and wrote that this time is now of peace. Both parties have fully agreed on the session. It is worth noting that after the US attack on Iran’s nuclear installations in the weekend, the price of Brent crude oil on Monday jumped to $ 81 per barrel. However, this increase was very limited. Oil producing countries did not cut any kind of cut in its production nor did Iran take any such step threatening to shut down the Straight of Hormuz.

In such a situation, despite geopolitical tension, there was no such jump in oil prices, which the market experts were expecting. One of the reasons for this is that the group of oil producing countries OPEC+ had agreed that even if the oil supply is interrupted from Iran, the rest of the member countries will continue to supply global supply.

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