Rupee vs Dollar: Ahead of Trump's decision on Iran, Indian currency depreciates further

On Tuesday, the US benchmark dollar index held firm ahead of President Donald Trump's decision on whether to reimpose sanctions to Iran, which is why, Indian rupee continued to depreciate further during the day. In early opening, the domestic unit was up 7 paisa to a fresh 15-month low of 67.20 against the US dollar at interbank forex market, due to appreciation of the American currency overseas amid sustained foreign capital outflows.

At around 1058 hours, Indian Rupee was trading at 67.225 above 0.100 points or 0.15% against US dollar index. 

Dealers in a PTI report, attributed the rupee's fall to increased demand for the US currency from importers.

However, a higher opening in the domestic equity market capped the losses, they added. 

According to Reuters report, in currency markets, the dollar broadly held firm on the prospect of solid U.S. economic growth, helped partly by Trump`s tax cuts and spending, pointed to further rises in U.S. interest rates down the road.

Further the report added that, global crude oil prices retreated from 3-1/2 year highs on Tuesday as investors waited on an announcement by President Donald Trump on whether the United States will reimpose sanctions on Iran. 

In previous trading session, the domestic unit closed at a 15-month low of 67.13 against the US currency following a surging demand for the dollar as crude oil prices zoomed past USD 75 per barrel level. At the same time, foreign portfolio investors made an outflow of Rs 1,928.66 crore cumulatively in equity, debt and hybrid market, as NSDL data. 

Moreover on Tuesday, the benchmark Sensex was trading at 35,294.36 above 86.22 points, however, in early opening the index surged by 180.73 points, or 0.51% to 35,388.87. On other hand, Nifty 50 was trading at 10,732.95 above 17.45 points or 0.16%.