The rupee depreciated by 14 paise to close at 90.70 (provisional) against the US dollar on Wednesday, weighed down by sustained dollar demand from importers and rising geopolitical tensions. 

At the interbank foreign exchange market, the domestic currency opened at 90.56 against the greenback. During the session, it touched an intraday high of 90.46 and a low of 90.75 before settling at 90.70, down 14 paise from its previous close. On Tuesday, the rupee had recovered from early losses to end 10 paise higher at 90.56 against the US dollar. 

Elevated crude oil prices

Forex traders said the local unit is trading with a slight negative bias amid geopolitical uncertainties and elevated crude oil prices. Persistent dollar demand from importers has added pressure on the rupee, although foreign portfolio investment (FPI) inflows may lend some support at lower levels. 

India–US trade deal

Market participants also pointed to evolving sentiment around the India–US trade deal. While investors initially reacted positively to the agreement, fresh concerns surfaced after the White House released a fact sheet detailing its key provisions. 

According to the fact sheet, India will eliminate or reduce tariffs on all US industrial goods and a broad range of American agricultural and food products. These include dried distillers’ grains, red sorghum, tree nuts, fresh and processed fruits, select pulses, soybean oil, wine and spirits, among other items. India has also committed to significantly increasing purchases of American goods, including energy, information, and communication technology products, agricultural commodities and coal, with total purchases expected to exceed $500 billion. 

Meanwhile, the dollar index, which measures the US currency’s strength against a basket of six major currencies, was trading 0.26% lower at 96.54. However, higher crude oil prices continued to weigh on sentiment, with Brent crude rising 1.44% to $69.78 per barrel in futures trade. 

In the domestic equity market, the benchmark indices Sensex and Nifty closed on a flat note in a choppy session on Wednesday as gains in PSU banks and auto shares were offset by losses in IT stocks. In a range-bound trade, the 30-share BSE Sensex slipped 40.28 points, or 0.05%, to close at 84,233.64. During the day, it hit a high of 84,487.34 and a low of 84,081.25. On the other hand, the NSE Nifty inched up 18.70 points, or 0.07%, to settle at 25,953.85.