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Business Desk- Currency Market Dollar Vs Rupees: On Tuesday (May 19), the Indian Rupee opened slightly weaker against the US Dollar at 96.37, whereas on Monday (May 18) it closed at 96.35. However, the rupee strengthened by more than 5 paise shortly after opening. Earlier, it had touched a record low of 96.40 against the dollar.

The domestic currency has been falling for seven consecutive sessions now, and during this period it has lost about 2.2%. Since the Iran conflict escalated in late September, the rupee has weakened by more than 6%. The main reason for this is the rising prices of crude oil and the persistent risk aversion environment in the global markets.

Currency traders said that the pressure on the rupee remains mainly due to high oil prices and strong demand for the dollar. In Asian trading, Brent crude hovered around $110 a barrel, as investors kept an eye on possible talks between the US and Iran over the conflict, as well as developments to the reopening of the Strait of Hormuz.

“Another day, another new high for the dollar/rupee pair,” said a bank currency trader, adding that the current run of rupee weakness is unlikely to be reversed unless there is a major decline in crude oil prices or massive inflows of dollars into India.

Despite US President Donald Trump’s statement that he has stopped the planned attack on Iran to keep the door open for talks, the market environment remained cautious. US equity futures and Asian markets were trading lower, putting further pressure on regional currencies.

A rise in US Treasury yields also weighed on Asian currencies, as investors noted that persistently high oil prices could keep inflation high for a long time.

Meanwhile, fuel retailers in India increased the prices of petrol and diesel by about Rs 0.9 per liter on Tuesday (May 19). This was the second such increase within a week, which reflects the impact of higher global crude oil prices.