Rupee opens 7 paise higher at 95.33 against US dollar

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The Indian rupee opened 7 paise higher at 95.33 against the US dollar on Tuesday, 7 July, tracking gains in most Asian currencies. However, traders said the local currency's underlying momentum remains weak after recent losses.
The rupee has declined more than 1% over the past six trading sessions and on Monday slipped close to the 95.50-per-dollar mark for the first time in a month.
According to a Reuters report, the rupee's rebound towards the 94-per-dollar level—supported by lower crude oil prices and measures by the Reserve Bank of India (RBI) to attract dollar inflows—appears to have lost steam, with the currency once again coming under pressure.
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 aggressive 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.
Brent crude is hovering near $72 per barrel, its lowest level in more than four months, as markets increasingly focus on ample supply. Over the weekend, OPEC+ agreed to raise production quotas once again, while Saudi Aramco reduced the official selling price of its Arab Light crude for Asian buyers by $1.10 per barrel, pushing it to a discount against the regional benchmark.
Market participants note that Saudi Arabia has typically resorted to such discounts during periods of market-share competition rather than supply shortages, suggesting growing confidence that global oil supplies will remain adequate.
However, despite this supportive backdrop, the rupee has failed to stage a meaningful recovery.
According to currency market experts, geopolitical uncertainty remains a key overhang for the rupee. Although tensions have eased since the ceasefire between the US and Iran, negotiations over sanctions relief, frozen Iranian assets, the future of the Strait of Hormuz, and Iran's nuclear programme remain unresolved.
The Strait of Hormuz continues to be closely watched, as it remains one of the world's most critical oil shipping routes. While traffic has largely normalised following recent disruptions, experts caution that the fragile peace leaves room for renewed volatility.
They believe that if the rupee is unable to strengthen despite lower crude prices, any escalation in geopolitical tensions that pushes oil prices higher could exert disproportionate pressure on the domestic currency.
The US dollar has also remained relatively resilient. Currency experts note that weakness in the Japanese yen prevented the greenback from extending its recent decline, thereby keeping pressure on emerging-market currencies, including the rupee.
Later in the session, the dollar pared some gains after the US ISM Services PMI eased to 54.0 in June from 54.5 in May, indicating a moderation in services sector activity. The softer data also reduced expectations of an aggressive Federal Reserve rate hike later this year, limiting further upside for the dollar.
On the domestic front, Indian equities continue to bolster investor sentiment. The Sensex gained more than 500 points in the previous session, while the Nifty 50 climbed above the 24,400 mark, reflecting sustained confidence in Indian assets.
However, experts also point to the latest Reserve Bank of India (RBI) data, which showed that India's foreign exchange reserves declined by $5.65 billion to $666.93 billion for the week ended 26 June. While reserves remain at comfortable levels, they say the decline underscores the RBI's continued efforts to manage currency volatility amid an uncertain global environment.
According to Amit Pabari, MD, CR Forex Advisors, the market is sending a subtle but important signal. The rupee is finding it difficult to gain even when oil prices are supportive, and the dollar is not aggressively strong. That suggests the underlying sentiment remains fragile.
“For now, 94.80–95.00 has shifted from resistance to support. A move towards the 95.80–96.00 zone cannot be ruled out if fresh geopolitical or oil-related risks emerge,” said Pabari.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.
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