Rupee trades down at 85.87 on higher crude prices, stronger dollar index

Rupee

The rupee opened marginally down on January 10 on strong dollar index and rising crude oil prices, currency experts said.

The local currency opened at 85.88 against the US dollar on January 10, and traded at 85.87 in early hours of the day, as against 85.86 at close in the last trading session.

"The Indian rupee gained slightly to 85.8475 on flows yesterday but may not be able to sustain the gains with a stronger dollar index and rising oil prices," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said earlier.

Oil prices climbed as cold weather gripped parts of the US and Europe, boosting winter fuel demand. Brent crude oil traded at $77.18 per barrel, up 26 cents or 0.34 percent.

Additionally, persistent domestic liquidity deficit averaging Rs87,985 crore in January has added to the rupee's struggles, Amit Pabari, managing director at CR Forex Advisors, said.

The rupee is likely to trade between 85.70 and 86.30 against the US currency, expecting the volatility to stay elevated before president-elect Donald Trump’s inauguration and policy reveals, Pabari added.