INR vs USD, on April 23: Indian rupee drops to 94.15 against US dollar amid elevated West Asia tensions

After the opening bell on Thursday, the Indian currency lost 38 paise to 94.15 against the US dollar around 9:09 am (IST), compared to 93.79 against the greenback at the previous market close, according to Investing.com data.

As of 9:19 am, the Indian rupee weakened 0.37% to 94.133 against the US dollar on Thursday, compared to the previous market close levels, according to the exchange data.

According to a PTI report citing forex traders, the Indian rupee also witnessed pressure due to the massive selling of domestic equities on April 23, which also weighed down both benchmark NIFTY50 and SENSEX indices on Thursday.

During Wednesday’s trading session, the Indian currency witnessed significant pressure from the elevated price of crude oil and the withdrawal of foreign capital from the Indian markets.

The trend continued on Thursday as the global benchmark crude oil, Brent crude futures, were trading 1.48% higher at $103.38 per barrel (bbl) during the morning market session, compared to $101.91 per bbl at the previous market close.

Dollar demand

Experts predict that the US dollar index charted its path to reach one-week high levels amid the ongoing geopolitical tensions between the United States and Iran at the Strait of Hormuz, the key global oil trading route, which is effectively closed due to President Trump’s blockade move.

Data collected from the Bloomberg US dollar spot index showed that the greenback was trading 0.10% higher at 98.691 as of 11:52 pm (EDT), on April 22, compared to the previous currency market close.

The dollar was witnessing higher demand in the market due to the rising oil prices and heightened demand for safer bets as investors tend to pull out of emerging market currencies in a situation of geopolitical uncertainty.

Investors were trading with caution as reports emerged of Iran attacking three ships in the Strait of Hormuz amid President Donald Trump’s extension of the ceasefire deal. Hopes of a potential peace deal between the two countries at war are strained in the market as the second round of negotiations towards the agreement remains uncertain at this point.