Rupee Falls to Record Low of 95.63 Against US Dollar in Early Trade

The rupee depreciated 35 paise to a record low of 95.63 against the US dollar in early trade on Tuesday, after US President Donald Trump said that the ceasefire with Iran was on life support with hopes for a deal with the country fading, triggering a surge in crude oil prices.

Market sentiments remained dominated by fears that the 10-week-old conflict could further tighten global supply, particularly after Trump rejected Tehran's latest response to a US-backed peace proposal, calling it totally unacceptable.

At the interbank foreign exchange market, the rupee opened at 95.57 against the US dollar and then fell further to an all-time low of 95.63 against the greenback, down 35 paise from its previous close.

On Monday, the rupee tanked 79 paise to settle at its record low of 95.28 against the US dollar.

"Oil prices were largely steady in Asian trade on Tuesday after climbing nearly 3 per cent in the previous session, as US President Trump said that the ceasefire with Iran was on life support, damping the hopes for a quick resolution to the conflict," said Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.14, up 0.19 per cent.

Brent crude, the global oil benchmark, rose sharply by 0.85 per cent to USD 105.10 per barrel in futures trade.

US President Donald Trump on Monday said the ceasefire with Iran was at its "weakest" and on "massive life support", a day after he rejected Tehran’s proposal to end the months-long war as "totally unacceptable".

"It is at its weakest… After reading that piece of garbage they sent us... It's on life support, massive life support," Trump told reporters at the Oval Office in response to a question on the ceasefire with Iran in the wake of the rejection of the peace proposal.

"They think that I'll get tired of this, or I'll get bored, or I'll have some pressure, but there's no pressure, there's no pressure at all. We're going to have a complete victory," Trump said.

On the domestic equity market front, Sensex fell 525.44 points to 75,489.84 in early trade, while the Nifty dropped 164.5 points to 23,651.35.

Foreign Institutional Investors offloaded equities worth Rs 8,437.56 crore on Monday, according to exchange data.