India Rupee Slips For 4th Day As Oil, Local Shares Weigh

The rupee settled at 71.34 against 71.22 at the previous close. The local unit moved in 71.31-71.52 per dollar band intra-day.
The Indian rupee fell against the dollar for a fourth session today, as higher oil prices that risked further widening of the current account deficit and weak local equities weighed on sentiment. Crude oil is the primary reason for weakness in the rupee and local shares, because higher oil impacts trade deficit and feeds into local inflation that is practically putting pressure on the currency despite global optimism over trade talks. Domestic tensions are also making investors nervous. A weakness in the rupee beyond 71.80 in coming days can lead to further depreciation towards 72.50.

Foreign exchange markets got off to a slow start Monday, with trading set to remain subdued due to a sparse data calendar in Europe and public holidays in North America. The dollar has retreated slightly over the weekend amid hopes that the U.S. and China will find a way to de-escalate their trade war. Such hopes were the main driver of a rally in Asian stock markets overnight
The euro was back above $1.13, up nearly half a cent from the low it hit on Friday when European Central Bank board member Benoit Coeure said the euro-zone economy’s slowdown had been deeper and broader than the ECB first thought.

Gold prices rose to their strongest level in more than two weeks on Monday as the dollar weakened on hopes the United States and China are nearing a trade deal, while palladium hit a record high.
The Brent crude oil contract rose to a near three-month high earlier today, gaining for fifth consecutive session, helped by supply cuts and due to optimism that the global trade dispute will end soon. India imports 80% of its crude oil requirements and a surge in oil risks widening of the country’s current account deficit.

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