INR vs USD: Rupee drops to fresh record low of 95.63 in early trade

Forex traders focused their attention on the weak global cues from West Asia after President Trump termed the US-Iran ceasefire deal as “unbelievably weak,” which in turn fuelled the US dollar demand in the market.

Traders tend to pull their money out of the riskier bets in the emerging markets, shifting their investment to safe-haven gold or benchmark currencies like the US dollar amid the uncertain geopolitical situation.

After dropping to record low levels, the Indian rupee recovered, trading 0.21% weaker against the US dollar at 95.498 as of 9:27 am (IST), compared to 95.293 at the previous currency market close, according to Investing.com data.

Oil & dollar move

The rising tensions between the United States and Iran have fuelled the demand for the benchmark global currency, the US dollar, and the price of crude oil in the market.

Data collected from the Bloomberg US dollar spot index (DYX) showed that the greenback was down 0.18% to 98.129 as of 12:39 am (ET) in the United States, compared to the previous market close levels.

Although the uncertainty was rising in the market, the oil remained elevated but steady during Tuesday’s trading session above $105 per bbl. Investing.com data showed that the oil prices were trading 0.83% higher at $105.08 per bbl, compared to the previous market close of $104.21 per bbl.

“Oil prices were largely steady in Asian trade on Tuesday after climbing nearly 3% in the previous session, as US President Trump said that the ceasefire with Iran was on life support, damping the hopes for a quick resolution to the conflict,” Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, told the news agency PTI.

Latest media reports from White House showed that US President Trump said that the ceasefire deal with Iran was at its “weakest” and on “massive life support” one day after the US leader rejected the Gulf nation’s response to the US proposal of a potential peace deal.

All eyes now remain on the West Asia front as investors await any positive signs of negotiations between the two nations or a potential peace deal.