Rupee tanks 52 paise to close at 95.48 against US dollar

Mumbai, Jul 8 (PTI) The rupee tanked 52 paise to settle at 95.48 against the US dollar on Wednesday as the US launched fresh strikes on Iran after Tehran struck three ships in the Strait of Hormuz, pushing up crude oil prices and strengthening the dollar. The US military attacked Iran early Wednesday after it said Tehran struck three ships in the Strait of Hormuz, part of an American effort that also revoked the Islamic Republic's ability to openly sell crude oil in the world market. Iran retaliated with strikes targeting Bahrain and Kuwait. Following the strikes, global crude oil prices rose exponentially. Brent crude, the global oil benchmark, was trading higher by 6.16 per cent at USD 78.73 per barrel in futures trade. Weak domestic equity markets further weighed on the local unit, according to forex traders. At the interbank foreign exchange market, the rupee opened at 95.15 against the US dollar and traded in the range of 94.98-95.61 during the day. It eventually settled at 95.48, down 52 paise from its previous close. On Tuesday, the rupee appreciated 47 paise to close at 94.96 against the US dollar. "The rupee opened weaker against the dollar and continued to remain volatile intra-day... the dollar was bought on dips as the equity markets were down and dollar index was up. Overall, today's rupee weakness was externally driven, mainly by higher crude oil prices, stronger US dollar, and geopolitical uncertainty," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said. The rupee is expected to remain in the range of 95.25 to 96.00 on Thursday, he added. According to Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, rupee traded sharply weaker as risk sentiment deteriorated following US President Donald Trump's statement that the ceasefire with Iran had ended and that no deal was possible. "The dollar index also strengthened above 101, adding further downside pressure on the rupee.," he said, adding, "the rupee is expected to trade in the 95.20-95.80 range in the near term, with volatility likely to remain elevated." Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 101.13, up 0.11 per cent. On the domestic equity market front, Sensex crashed 1,677.12 points, or 2.15 per cent, to 76,503.60, while Nifty plummeted 516.65 points, or 2.12 per cent, to 23,882.05. Foreign institutional investors purchased equities worth Rs 1,962.80 crore on a net basis on Wednesday, according to exchange data. PTI TRB HVA