Rupee Seen Opening Higher as Dollar Weakness and Softer Oil Boost Sentiment

The Indian rupee is expected to open slightly stronger on Thursday, supported by broad-based US dollar weakness as fading expectations of a Federal Reserve rate hike next month and softer Brent crude prices continue to underpin sentiment.

In the NDF market, the Indian rupee is trading at 95.00-95.05 range, after closing 95.1175 on Wednesday.

The currency on Wednesday briefly strengthened beyond the 95-per-dollar mark for the first time in a month before paring gains amid corporate dollar demand and intraday speculative buying.

Oil price volatility added to the pressure on the rupee, although the currency has recovered nearly 1.7% from its recent lows.

The rupee briefly slipped to around 95.25 against the US dollar during Wednesday's session before trimming its losses.

Asian currencies edged higher against the US dollar on Thursday, while the dollar index eased to 99.64.

Fading expectations of a Federal Reserve rate hike next month, coupled with optimism over a potential U.S.-Iran deal, pressured the US dollar.

Oil prices eased on Thursday as investors assessed whether progress in Iran-Oman talks could pave the way for a potential U.S.-Iran peace agreement.

Brent crude futures fell to as low as $79.04 per barrel before rebounding to around $79.68.

Lower oil prices and weaker-than-expected U.S. private employment data led traders to scale back expectations of a Federal Reserve rate hike in September, with the implied probability falling to 55% from nearly 70% at the start of the week.

Indian equities are poised for a higher open on Thursday, supported by optimism over a diplomatic resolution to the Middle East crisis and a stronger-than-expected June-quarter earnings season so far.

GIFT Nifty futures were trading at 24,686.50, signaling a positive start for the Nifty 50 after it closed at 24,624.65 on Wednesday.

Foreign portfolio investors have purchased $1.27 billion worth of Indian equities so far in August, following net inflows of $2.12 billion in July.