Re tumbles 30 paise on rising dollar, crude oil price

Mumbai: Snapping its three-session rising streak, the rupee tumbled 30 paise to close at 74.58 against the US dollar on Tuesday amid elevated crude oil prices and a strong greenback overseas. Forex traders said growing concerns over the Omicron variant of the coronavirus and its impact on economic recovery weighed on the local unit.

At the interbank foreign exchange market, the local currency opened at 74.49 and witnessed an intra-day high of 74.46 and a low of 74.61 against the US dollar. The local unit finally settled at 74.58, down 30 paise over its previous close of 74.28. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.02 per cent up at 96.23. Meanwhile, Brent crude futures, the global oil benchmark, advanced 0.39 per cent to $79.29 per barrel.

"The Indian rupee depreciated against the US currency on Tuesday, weighed down by prospects of an earlier-than-anticipated interest rate hike by the Federal Reserve. The US dollar was trading with gains on Tuesday evening against the basket of currencies, boosted by expectations of the US Federal Reserve rate hikes," said Sriram Iyer, senior research analyst at Reliance Securities.

Jateen Trivedi, senior research analyst at LKP Securities, adds that "rupee fell as US dollar and crude prices traded on a positive note. Lockdown or restrictions in Maharashtra can give further weakness as major cities witnessed rise in Covid-19 cases affecting small businesses.