MUMBAI–The Indian rupee strengthened against the U.S. dollar Thursday, extending its gains for a fifth consecutive trading session, as global crude oil prices continued to decline amid expectations that the United States could move toward ending its military conflict with Iran.
The rupee opened 29 paise higher at 94.35 against the dollar, compared with Wednesday’s closing level of 94.64.
The currency’s advance came as international oil prices fell sharply, supported by hopes that the outcome of the U.S. midterm elections could increase pressure on President Donald Trump to pursue a diplomatic resolution to the conflict.
Brent crude futures declined $1.16 to $93.46 per barrel, extending losses for a fourth consecutive session.
U.S. West Texas Intermediate (WTI) crude futures fell $1.47, or 1.66%, to $86.65 per barrel.
Both major oil benchmarks had dropped approximately 10% in the previous session, closing below $100 per barrel. Crude prices have now declined nearly 16% since the beginning of the week.
The selloff followed sweeping Democratic victories in the U.S. midterm elections, which gave the party control of both chambers of Congress and weakened Trump’s legislative position.
Market participants expect the political shift in Washington could make it more difficult for the administration to sustain or expand military operations against Iran.
A Democratic-controlled Congress could potentially seek greater oversight of military spending and increase pressure on the administration to pursue negotiations.
Reports also suggested that a major escalation of military operations against Iran had become less likely.
Trump reportedly indicated that Washington had no immediate plans to launch additional strikes against Iran, further easing concerns about disruptions to global energy supplies.
Oil markets were also encouraged by signs of improving shipping conditions through the Strait of Hormuz, one of the world’s most important waterways for transporting crude oil from the Persian Gulf.
Crude shipments through the strait have reportedly recovered to levels approaching those recorded before the conflict, although transportation costs remain elevated.
The recovery in shipping activity has helped reduce concerns about prolonged supply disruptions, contributing to the decline in international oil prices.
Lower crude prices are particularly important for India because of the country’s substantial dependence on imported petroleum.
A sustained reduction in energy costs could help ease inflationary pressures, reduce India’s import bill and provide support for the rupee.
The U.S. dollar also weakened modestly against major international currencies.
The dollar index, which measures the greenback against a basket of currencies, declined 0.06% to 101.41 after falling 0.36% in the previous session.
Indian stock markets responded positively to the improving global outlook, with major equity benchmarks recording substantial gains during early trading.
The BSE Sensex opened at 78,910.94, gaining more than 1,600 points, or approximately 2%.
The NSE Nifty 50 began the session at 24,378.05, advancing 417.45 points, or 1.74%.
The simultaneous rise in Indian equities and the rupee reflected improving investor sentiment as declining oil prices and expectations of reduced geopolitical tensions provided support to financial markets.
However, the outlook for currencies and energy prices remains sensitive to developments in the Iran conflict and potential changes in U.S. foreign policy. (Source: IANS)
