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.
