Rupee back below 92 vs dollar

MUMBAI: The rupee fell 23 paise to close at 92.04 against the US dollar on Wednesday, down 0.2%, as volatile oil prices and a sharp fall in domestic equities weighed on the currency. Intermittent dollar sales by state run banks on behalf of RBI limited the losses.Oil prices firmed above $90 per barrel after the US and Israel exchanged missile strikes with Iran. Fears of the latter attacking vessels in the straits of Hormuz worsened sentiment in the second half.“Volatile crude prices kept pressure on the currency. Oil movements remain a key driver for the rupee, with crude on the domestic exchange rising nearly 7% today, which tends to widen India’s import bill and weigh on the currency. For now, the expected trading range for the rupee is 91.25-92.60,” Jateen Trivedi, analyst with LKP Securities, said. He added that market participants will closely watch US CPI data and crude oil inventory numbers, which could influence both the dollar index and global commodity prices.Market volatility had eased on Tuesday after President Trump indicated that the war could end soon. Market volatility has also affected corporate foreign exchange hedging. Importers stepped up hedging while exporters faced mark to market losses on positions taken last month. Finrex Treasury Advisors said importers should buy dollars on dips in the USD-INR pair. Exporters can lock partial hedges when the pair moves above 92. The dollar index was trading 0.14% higher at 98.96. Brent crude futures rose 5.44% to $92.58 per barrel.