Indian rupee strengthened below 70 level against the dollar on Thursday, although it weakened later as surging oil prices dented sentiment.
The Indian rupee strengthened to 69.92 against the dollar, before trading 0.49 per cent higher or weaker at 70.30. A dirham fetched 19.15 Indian rupees.
“Oil prices are putting pressure along with election uncertainty. There is more likelihood of Indian rupee touching 72 levels in a month,” Phaneendar Bhavaraju, managing partner and head global market strategy at Arrow Capital told Gulf News.
Brent crude breached the keenly watched $75 (Dh275) per barrel mark on Thursday, as the US decision to remove Iran sanctions waivers and a drop in Russian flows fuelled supply fears. India imports majority of its consumption requirements.
The Indian currency has trading in a 3 rupee range as support from foreign inflows was offset by weakness due to oil prices and political uncertainty. The rupee had hit an all-time low of 74.48 in October.
“The USD/INR has pushed higher over the past few weeks and is now threatening to break its corrective bearish trend line, potentially resuming its long-term rally,” said Fawad Razaqzada, Technical Analyst, FOREX.com
“Also hurting the Indian Rupee is the fact that the nation’s central bank has adopted a dovish monetary policy stance, cutting interest rates twice this year,” he added.