INR vs USD: Rupee weakens to 96 for the first time against US dollar on May 15

Investing.com data showed that the Indian rupee dropped to 96 against the US dollar in the afternoon market hours. As of 03:09 pm (IST) on Friday, the domestic currency was trading 0.42% weaker at 95.96 against the US dollar, compared to 95.57 at the previous market close.

The Indian currency was witnessing significant pressure during Friday’s market session due to a higher demand for dollars in the global market, caused due to US President Trump’s latest signal that the conflict in West Asia will continue.

The data also showed that the Indian rupee has weakened by nearly 1.5% in the last one week, and has dropped 2.6% against the US dollar over the last one month period. The currency has lost 5% since the beginning of the US-Iran conflict.

Although the foreign investors resumed buying in the equities, the support was not enough to boost the sentiment for emerging markets like India. NSE data showed that FII’s purchased only ₹187.46 crore worth of assets during Thursday’s market session.

US Dollar up 0.32%

Data collected from the Bloomberg US dollar spot index (DYX) showed that the greenback was trading 0.32% higher at 99.137 as of 2:26 am (ET) in the United States, compared to the previous currency market close.

Traders were earlier focused on any positive cues from Donald Trump and Xi Jinping’s meeting in China; however, Trump’s signal on the West Asia conflict continuing dawned as a cautionary cue for the global investors, in turn fuelling dollar demand.

Investors tend to pull their money out of riskier bets like that in emerging market currencies in cases of heightened geopolitical uncertainty, shifting their investments into steadier and safer assets like the greenback.

Forex traders told the news agency PTI that the Indian rupee was closing in on 96 levels against the US dollar amid the buying spree in the market and higher crude oil prices.

“The Dollar Index rose for a fourth straight session after strong US retail sales and stable labour market data reduced expectations of aggressive Federal Reserve rate cuts,” said Amit Pabari, the managing director of CR Forex Advisors, told the news agency.

Investors were focused on the tightening of the conditions for issuing and monitoring advance authorisation for the import of gold in the country.