The rupee fell 4 paise to 95.52 against the US dollar in early trade on Thursday, weighed down by surging crude oil prices after fresh tensions in West Asia rattled sentiments worldwide, raising fears of uncertainties over global trade.
According to analysts, oil prices soared to their highest point in weeks after President Donald Trump announced an end to the ceasefire with Iran in response to Iranian attacks on commercial ships in the Strait of Hormuz and on American military sites in other Gulf nations.
However, positive sentiment in domestic equity markets supported the Indian currency, they said.
At the interbank foreign exchange market, the rupee opened at 95.52 and remained weaker against the US dollar, down 4 paise from its previous close.
On Wednesday, the rupee plunged 52 paise to settle at 95.48 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 100.98, down 0.09 per cent.
Brent crude, the global oil benchmark, was trading higher by 1 per cent at USD 78.80 per barrel in futures trade.
Analysts attributed the sharp rise in crude prices to the fresh escalation in West Asia tension, which is likely to block the Strait of Hormuz and restrict the movement of oil tankers.
The domestic equity market saw some recovery, with Sensex rising 454.78 points, or 0.59 per cent, to 76,958.38, and Nifty climbing 151.10 points, or 0.63 per cent, to 24,033.15. Both indices crashed over 2 per cent in the previous session.
Foreign institutional investors purchased equities worth Rs 1,962.80 crore on a net basis on Wednesday, according to exchange data.