Rupee hits two-week high as oil prices, geopolitical tension ease

Mumbai: The Indian rupee on Monday strengthened for the third session to a two-week high against US dollar after crude oil prices posted its biggest drop in about a year and the US-Korea summit appears to be back on track.

At 9.15am, the home currency was trading at 67.51 against the US dollar, up 0.43% from its previous close of 67.77. The currency opened at 67.50 a dollar and touched a high of 67.45—a level last seen on 11 May.

Oil prices extended losses and were near $67 a barrel after Saudi Arabia and Russia proposed easing output curbs after eliminating an inventory surplus. Oil earlier this month rose to highest level in more than three years after President Donald Trump’s decision to reimpose sanctions on Iran and plunging Venezuelan output fuelled supply concerns.

Also easing geopolitical tensions from revived hopes for US-Korea summit boosted sentiment. President Trump appeared to confirm his summit with North Korean leader Kim Jong Un is back on, three days after he abruptly called it off.

The 10-year bond yield stood at 7.742% from its Friday’s close of 7.797%. Bond yields and prices move in opposite directions.

So far this year, the rupee has weakened 5.3%, while foreign investors have bought $160.50 million and sold $4.39 billion in equity and debt markets, respectively.

Benchmark Sensex Index rose 0.69% or 240.04 points to 35164.91. Since January, it has gained 3.1%.

Asian currencies were trading higher. Indonesian rupiah was up 0.86%, South Korean won 0.34%, Taiwan dollar 0.21%, Singapore dollar 0.21%, Thai baht 0.15%, Philippines peso 0.06%. However, Malaysian ringgit and Japanese yen were down 0.05%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.978, down 0.29% from its previous close of 94.253.