Rupee started Monday on a weak note as higher crude oil prices and geopolitical tensions weighed down the currency, while growing expectations of a September US Fed rate hike boosted the dollar. Rupee opened at 95.56 against the US dollar at the interbank foreign exchange market, 13 paise lower than its previous close. It had ended Friday at 95.43, gaining 2 paise.Market participants have increased their bets on a September Fed rate hike, forex traders said. The resulting rise in US Treasury yields has supported a broad-based rally in the dollar, adding to the pressure on investor sentiment.“The rupee opened lower as the dollar index was at 99.62 level, while most other assets fell from their levels on Friday,” said Anil Kumar Bhansali, head of treasury and executive director Finrex Treasury Advisors LLP.Bhansali expects limited movement in rupee through the session, with the currency likely to remain between 95.25 and 95.75.“The rupee is expected to be in the range of 95.25 to 95.75 with exporters to sell near 95.60 levels and importers to buy all dips that they get with no directional movement being seen in the currencies,” Bhansali added.The dollar index, which tracks the greenback against a basket of six currencies, was at 99.62, marginally lower by 0.07 per cent.Oil prices, meanwhile, moved higher amid renewed concerns over supplies from the Middle East. Brent crude futures, the global oil benchmark, climbed 1.34 per cent to $89.28 a barrel. The increase followed a renewed Middle East supply-risk premium after the US strike on Iran’s Larak Island and subsequent Iranian retaliation, raising fresh concerns over oil flows through the Strait of Hormuz.The Reserve Bank of India is intervening in the foreign exchange market to check any significant depreciation in the rupee, forex traders said. Sentiment also received some support from better-than-expected flows under the FCNR(B) scheme.Pressure was also visible in domestic equities, with Sensex falling 226.60 points to 77,028.56 and Nifty declining 120.40 points to 24,053.55 in opening trade.Foreign institutional investors had sold equities worth Rs 5,039.80 crore on a net basis on Friday, according to exchange data.Rupee’s movement comes even as India’s foreign exchange reserves reached a record high. The country’s reserves rose by $12.422 billion to $729.328 billion in the week ended August 21, the RBI said on Friday.Meanwhile, the focus on India-US trade is set to continue, with the commerce ministry scheduled to meet industry associations and representatives of export promotion councils on September 1 to discuss India-US trade performance.The meeting will be chaired by commerce ministry additional secretary Darpan Jain, who is also India’s chief negotiator for the India-US bilateral trade agreement.
