The Indian rupee on Tuesday opened 7 paise higher at 95.33 against the US dollar in early trade, tracking gains in most Asian currencies.
However, traders said the local currency’s underlying momentum remains weak after recent losses. The rupee had witnessed a decline of over 1 per cent over the past six trading sessions and on Monday it slipped further to the 95.50 per dollar mark for the first time in a month.
As per fresh reports, the rupee has somewhat rebounded to the 95 dollar mark after slipping to historic lows during the US-Iran war and the rise in crude oil prices.
The currency was supported by the Reserve Bank of India through several intervention efforts, including capping the dollar purchases by other banks.
Persistent dollar demand from importers, expectations that the US Federal Reserve could still raise interest rates later this year, and arbitrage-related outflows have continued to weigh on the rupee.
Meanwhile, the US dollar index, which had strengthened on Fed rate hike expectations, eased after weaker-than-expected US jobs data for June tempered expectations of further monetary tightening.
Despite a sharp correction in crude oil prices, currency experts believe the Indian rupee has struggled to benefit, highlighting that domestic and global headwinds continue to outweigh the positive impact of cheaper energy imports.
Also read: Rupee loses 9 paise to 95.27 against US dollar in early trade
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