Rupee closes flat as traders remain cautious ahead of US elections
The currency ended at 94.90 per dollar despite a decline in Brent crude prices and a weaker US dollar.
The Indian rupee closed nearly unchanged on Monday, finishing at 94.90 per dollar compared to the previous session's close of 94.95. According to reports from The Economic Times and BusinessLine, the currency lost initial gains as market participants maintained a cautious stance before the US midterm elections scheduled for Tuesday.
Brent crude oil prices fell by more than 4 per cent to $108.3 per barrel, reaching their lowest level since October 21. This decline occurred amid hopes for a resolution to the Iran war, following reports that Iranian negotiators left peace talks in Doha on Sunday.
The US dollar index decreased by approximately 0.5 per cent to 101.5. Investors are monitoring the US elections to see if Democrats can take control of Congress from President Donald Trump's Republican Party, an outcome that could influence the Iran war and AI investments.
MUFG stated in a note that while a significant Republican defeat might weaken the US dollar, it is not expected to be a game changer on its own. Meanwhile, a trader at a foreign bank noted that rupee gains might be limited near 94.50 due to the Reserve Bank of India (RBI) potentially buying dollars to refill foreign exchange reserves.
Data from Friday showed the RBI's net short dollar forward position rose to nearly $240 billion in September from $200 billion in August.
