The rupee opened five paise higher at 69.62 against the US dollar on Tuesday. The domestic unit on Monday plunged by 32 paise to close at a two-week low of 69.67, following a spike in crude oil prices on reports that the US will end waivers on Iranian oil imports.
A fall in domestic equity markets
also weighed on the rupee. A weak US dollar against major global currencies capped losses of the domestic currency.
On the global front, oil prices hovered near 2019 peaks in early trading on Tuesday after Washington abruptly moved to end all Iran sanctions waivers by May, pressuring importers to stop buying from Tehran.
The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which allowed Iran’s eight biggest buyers, most of them in Asia, to continue buying limited volumes, Reuters reported.
"India is one of the importers of Iranian oil which is why rupee started to feel the pain. Today, USD/INR pair is expected to quote in the range of 69.40 and 69.95," says Gaurang Somaiya, Research Analyst (Currency) at Motilal Oswal Financial Services (MOFSL).
In the equity market, Asian shares were flat in the early trade on Tuesday over concerns China may slow the pace of policy easing curbing the market’s enthusiasm.
In the currency market, the dollar index eased 0.2 per cent overnight and last traded steady at 97.328.