The rupee opened 19 paise higher on August 20, trading at 95.56 against the dollar after ending the previous session at 95.75. The rise came as the U.S. dollar slipped to a three‑month low.
The U.S. Treasury announced it would at least double its purchases of long‑dated government bonds, from $2 billion to $4 billion per operation, starting on September 9. It is also raising funds through short‑term bills while buying back longer‑term bonds.
The dollar index fell 0.8 percent to 98.83, its lowest level since mid‑May, reflecting the impact of the Treasury move.
The sell‑off in long‑dated treasuries pushed the 30‑year yield to its highest level since 2007, driven by inflation worries and investors demanding a higher term premium.
Investors remain cautious as Brent crude prices hover near $92 a barrel, and the U.S.–Iran deadlock over the Strait of Hormuz continues to weigh on sentiment.
At home, the Reserve Bank of India has been selling dollars to prevent a sharp rupee depreciation, according to traders. Immediate support is seen around Rs 95.30–95.50, and the rupee is expected to move toward Rs 96.20–96.50 as the dollar weakens.
Oil markets are still assessing the outlook for the U.S.–Iran conflict and the security of shipping through Hormuz. A currency trader noted that the dollar’s decline may not do much for the rupee, but buyers will likely target the opening dip.
Overall, the rupee is likely to stay within the 95.5‑96.5 range in the short term, with oil prices and market sentiment remaining fragile.