Rupee Closes Stronger After Trade Deficit Narrows
The domestic currency will see support at 85.45-85.32 levels, while resistance will be at 86.25-86.40 levels.
The Indian rupee closed 3 paise stronger at 86.06 against the US dollar on Monday in comparison to its previous close of 85.09 on Friday. This comes after India's trade deficit fell to $21.88 billion in May from $26.42 billion in April, according to data from the Ministry of Commerce and Industry on Monday.
The domestic currency opened 9 paise weaker at 86.18 against the US dollar. "The Indian Rupee started flat against the Dollar on Monday morning trade as an uptick in oil prices offset mild interbank dollar sales," said Sriram Iyer, senior research analyst at Reliance Securities.
According to Ritesh Bhanshali, director, Mecklai Financial Service Ltd. the domestic currency was under pressure amid strong dollar, weak India CPI, rising oil, and FII selling, but RBI intervention limits gains.
The domestic currency will see support at 85.45-85.32 levels, while resistance will be at 86.25-86.40 levels, added Bhanshali.
Additionally, the US dollar gained marginally against a basket of currencies on Monday morning trade driven by safe haven buying after rising geopolitical concerns in the Middle East.
Brent crude prices on Monday initially rose as much as 5.5% after a weekend of attacks but quickly pared most of that move to turn negative. Brent crude – the global benchmark for crude oil – fell 0.38% to $73.95.
The Brent crude had slipped below $59 in May, the lowest level since February 2021. In the last two months crude prices have tumbled to four years low amid US President Donald Trump's tariff wars. However, with the flare in tensions oil had jumped over 13% on Friday.
